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2017 (12) TMI 1696 - AT - Income TaxDisallowance of Bank Charges - as per AO assessee company had paid the bank charges for processing of working capital loan which in his opinion was a capital expenditure and hence not allowable under section 37(1) - HELD THAT:- DR had not brought to our notice any distinguishing facts in the present case as compared to the facts in the preceding years wherein identical expenditure had been held to be revenue in nature and allowed in appeal both by the CIT(Appeals) and the I.T.A.T. For the aforesaid reason, since the issue stands decided in favor of the assessee in preceding years and in the absence of any distinguishing facts having been brought to our notice, we uphold the order the of the Ld. CIT(Appeals) deleting the disallowance of bank charges Addition u/s 14A r.w.r. 8D - A.O. made the impugned disallowance on account of the fact that the assessee company had made investments in shares/mutual funds, the income from which was exempt from tax - CIT(Appeals), restricted part addition as disallowance made on account of interest as per rule 8D(2(ii) of the Income Tax Rules,1962, for the reason that the assessee had sufficient interest free funds of its own for making the investments. The disallowance on account of administrative expenses as per rule 8D(2)(iii) was however upheld - HELD THAT:- No infirmity in the order of the Ld. CIT(Appeals) deleting the disallowance. The assessee had repeatedly contented both before the A.O. and the CIT(Appeals), that it had utilized its own interest free funds for the purpose of making the impugned investments which were made in earlier years. As submitted by the assessee that the said investments were made in financial years 2005-06 & 2006-07 when the cash accruals from the business of the company were to the tune of ₹ 37.08 Crores and ₹ 51.71 Crores which were sufficient for making the impugned investments of ₹ 34.65 Crores. Copies of financial statements of the said years were also filed. Based on the above facts the CIT(Appeals), we find, deleted the disallowance made following the decision of the jurisdictional High Court in the case of Hero Cycles Ltd. [2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT]
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