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2017 (12) TMI 1001 - AT - Income TaxAddition u/s 14A - sufficiency of own funds - Held that:- The presumption will be that the assessee has made investment out of interest free funds unless and until the AO has pointed out in nexus that the investment that all the interest bearing funds have been invested. The presumption will be in favour of assessee in view of the decision of Hon'ble Bombay High Court decision in the case of CIT vs HDFC Bank Limited [2014 (8) TMI 119 - BOMBAY HIGH COURT]. In view of the above facts and circumstances, assessee has share capital and resources which is much more than the investment of tax free incomes and once assessee has sufficient own funds for making investment, then the presumption will be that no disallowance can be made on account of interest. This view of ours is supported the decision of Hon’ble Bombay High Court in the case of HDFC Bank Ltd. (supra). Accordingly, we are of the view that the CIT(A) has rightly deleted the addition and we confirm the same. Similarly, in respect of disallowance under Rule 8D(2)(iii), there is no expenses relatable to exempt income in the profit and loss account of the assessee and other expense of ₹ 3,64,208/- have already been disallowed by the assessee suo moto. In view of these facts, we confirm the order of CIT(A) and this issue of Revenue’s appeal is dismissed. Disallowance under section 14A r.w.r 8D made while computing book profit under section 115JB - Held that:- This issue is covered in favour of assessee and against Revenue by the decision of Special Bench of this Tribunal in the case of ACIT vs. Vireet Investments (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein the Tribunal has clearly held that no disallowance under section 14A of the Act r.w.r 8D of the Rules can be made while computing book profit under section 115JB of the Act. The learned CIT Departmental Representative could not controvert the above proposition. Disallowance of redemption of the provision made for reduction of preference shares while computing the book profit under section 115JB - Held that:- Delete the disallowance made by AO on account of the reduction of provision made on the redemption of preference shares. Accordingly, the orders of the lower authorities are reversed and this issue of the assessee’s appeal is allowed. Scope of assessment u/s. 153A in respect to completed assessment - Held that:- Once assessment has attained finality, then the AO while passing independent assessment order u/s. 153A/143(3) of the Act could not disturb the assessment order which has attained finality unless the material gathered in the course of search u/s. 132/153A of the Act established that the finality attained in the assessment were contrary to the facts unearthed during the course of search. See CIT vs Continental Warehousing Corporation (Nhava Sheva) Ltd.(2015 (5) TMI 656 - BOMBAY HIGH COURT ). Accordingly, we confirm the order of CIT(A) and this appeal of Revenue is dismissed.
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