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2019 (3) TMI 1060 - AT - Income TaxDisallowance u/s 14A r.w.r 8D - own funds far exceeded the investment - HELD THAT:- We find that it is undisputed fact that assessee’s own funds far exceeded the investments made by the assessee, the details of which have been placed on record. Therefore, in terms of binding decision of Hon’ble Bombay High Court rendered in CIT Vs. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] & CIT Vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT], a presumption was to be drawn in assessee’s favor that the investments were made out of interest free funds available with the assessee unless the revenue authorities could prove the nexus of borrowed funds with the investments made by the assessee. Nothing on record suggest such nexus. Therefore, interest disallowance u/r 8D(2)(ii) could not be held to be justified additional expense disallowance - As held by ACIT Vs. Vireet Investment (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein it has been held that only exempt income yielding investments were to be considered to arrive at the said disallowance. Therefore, the additional expense disallowance, as computed by Ld. AO could not be sustained. Therefore, we find no infirmity in the stand of Ld. first appellate authority. Provision for Mark to Market Losses [MTM] - HELD THAT:- CIT(A) correctly deleted both the additions by relying upon its own decision in assessee’s own case for AY 2011-12. Aggregate disallowance u/s 14A read with Rule 8D which comprised-off of interest disallowance u/r 8D(2)(ii) and expense disallowance u/r 8D(2)(iii) - AY 2012-13 - HELD THAT:- The assessee’s submissions as extracted in the quantum assessment order reveal that assessee’s own funds far exceeded the investment and therefore, no interest disallowance was justified in the absence of nexus of borrowed funds with the investments. So far expenses disallowance is concerned, it is undisputed fact that no exempt income has been earned by the assessee during impugned AY and therefore, no disallowance on this account
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