Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 1620 - ITAT CHENNAIDisallowance u/s.14A r.w.r 8D of the Rules - HELD THAT:- If the assessee has invested in its sister concerns for strategically reasons from its own interest free capital and reserves, then provisions of Section 14A of the Act will not be applicable, because prima facie Section 14A warrants that the assessee should have incurred some expenditure in relation to the income which does not form part of the total income under the Act. There will be no overhead cost to the assessee when it decides to invest in its own sister companies for strategic reasons at least in the case of the assessee firm before us. However if the assessee had made such investments out of its interest bearing funds then the interest cost will be directly attributable to such investments and cannot be claimed as deduction from any other activities of the assessee bearing taxable income. Since the Ld.AR had pointed out to us that the assessee had made the investments in its sister concerns for strategic reasons out of its own interest free funds, we find it appropriate to remit the matter back to the file of Ld.AO for fresh consideration and to pass appropriate order in accordance with law and merit and based on our above mentioned observations. Appeal of the assessee is allowed for statistical purposes.
|