Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 1132 - AT - Income TaxDisallowance u/s 14A - Double deduction - Held that:- As observed that the assessee company has made investments of ₹ 1.47 crores in shares yielding exempt income which is same as in the preceding year as no fresh investment has been made during the year, while net owned funds of the assessee company comprising share capital and reserves are to the tune of ₹ 1.86 crores as on 31-03-2009 and ₹ 1.91 crores as on 31-03-2008 which are far in excess of the investments made by the assessee company of ₹ 1.47 crores in shares yielding exempt income. The assessee company has stated that the borrowed funds are utilized for project and none of the borrowed funds were used for the purposes of making investments in shares yielding exempt income which is also not controverted by the Revenue. In any case since there are net owned funds which are far in excess of investment in shares as set out above, presumption will apply as per decisions of Hon’ble Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT ) and in the case of HDFC Bank Ltd. v. DCIT (2014 (8) TMI 119 - BOMBAY HIGH COURT ) and decision of HDFC Bank Limited v. DCIT [2016 (3) TMI 755 - BOMBAY HIGH COURT] and hence no disallowance is warranted for interest paid by the assessee company under Section 14A of the Act read with Rule 8D(2)(ii) of Income Tax Rules, 1962 . Also as the assessee company had made disallowance of ₹ 73,740/- voluntarily of its own under Section 14A of the Act read with Rule 8D(2)(iii) of Income Tax Rules, 1962 and the learned CIT(A) confirmed the same amount in his appellate orders dated 27-08-2012 which has led to double disallowance of the same amount which is added twice to the income of the assessee company which is not permitted under the Act. Hence we order deletion of the additions made by the AO as sustained by learned CIT(A) u/s 14 A of the Act read with Rule 8D of Income Tax Rules, 1962. It is also not brought on record that the Revenue is in appeal against the appellate orders of the learned CIT(A) - Decided in favour of assessee
|