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2016 (4) TMI 1382 - AT - Income TaxDisallowance under section 14A - HELD THAT:- We observe that the assessee has more than sufficient owned funds to make investments. Since it is having huge owned funds and in comparison to that investments are of a very lesser amount, in view of the judgment of the Jurisdictional High Court in the case of Kapsons Associates Investment P. Ltd. [2015 (8) TMI 1277 - PUNJAB AND HARYANA HIGH COURT], we can safely infer that the investments have been made out of owned funds and not from borrowed funds. no disallowance under sect ion 14A of the Act with respect to interest expenditure can be made. As regards the administrative expenditure, we are in agreement with the submissions of the learned counsel for the assessee that in the case of CIT Vs. Deepak Mittal [2013 (9) TMI 764 - PUNJAB & HARYANA HIGH COURT] has held that in the absence of any satisfaction recorded by the Assessing Officer as to the claim of the assessee, the disallowance made by him on account of administrative expenses under Rule 8D of the Income Tax Rules is not as per law. In view of the above, the act ion of the learned CIT (Appeals) in deleting the disallowance made by the Assessing Officer under sect ion 14A of the Act is confirmed. Disallowance of interest u/s 36(l)(iii) on investment in shares - shares were actually allocated much later and the money was not actually used by assessee for business purpose - HELD THAT:- From the perusal of record and submissions given by the learned counsel for the assessee, there is no dispute to the fact that the assessee is having more than sufficient owned funds much larger than the total investments made in the share capital of the subsidiary companies. Therefore, we are in agreement with the arguments of the learned counsel for the assessee in view of the judgment of the Jurisdictional High Court in the case of Bright Enterprises [2015 (11) TMI 342 - PUNJAB & HARYANA HIGH COURT] and Kapsons Associates Investments P. Ltd. [2015 (8) TMI 1277 - PUNJAB AND HARYANA HIGH COURT] we can very easily presumed that the investments have been made out of the non interest bearing funds. Therefore, no disallowance under sect ion 36(1) (iii) of the Act can be made. Since it is held that the investments were made out of non interest bearing funds, it is automatically presumed that with regard to these investments the assessee had not made any claim of interest under sect ion 36(1) (ii) - there is no need for the assessee to prove that the funds were lent for business purposes or not. In view of this, we do not find any need to interfere in the order of the learned CIT (Appeals) in this respect Addition on account of capitalization of capital advance by holding that these were for "purchase of spares" - before AO the assessee claimed these to be for "machinery" and hence filed different facts before Ld. CIT(A) - HELD THAT:- We do not find any infirmity in the order of the learned CIT (Appeals) since he has been fair enough to confirm the disallowance made by the Assessing Officer on account of interest of advance meant for purchase of generator, which is a capital asset to be acquired. However, with regard to two other advances, no capital asset is expected to come into existence. Therefore, the interest on these advances cannot be disallowed by the Assessing Officer. The grounds of appeal raised by the Revenue are dismissed. CIT(A) powers u/s 251(1)(a) to remand back the issue to AO - CIT(A) erred in directing A.O. to pass a speaking order on the issue of adjudication of provision of Wealth Tax from the statement of taxable income prepared u/s 115JB - HELD THAT:- On perusal of the provisions of sect ion 115JB of the Act and the Explanation appended thereto, we are in agreement with the argument of the assessee that the only amount to be added back for calculating the book prof it under sect ion 115JB is that of income tax. Since the assessee had omitted to exclude wealth tax out of computation of book prof it, the Assessing Officer also did not do the same and had discussed the weal tax provision, we are also in agreement with the content ion of the Department that the CIT (Appeals) having no powers to set aside the issue to the file of the AO. However, in the interest of justice, we would like to send this issue back to the Assessing Officer and direct him to re-compute the book prof it under sect ion 115JB of the Act after excluding wealth tax provision on the same. The ground raised by the Revenue is allowed for statistical purposes.
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