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2021 (11) TMI 360 - ITAT AHMEDABADAddition u/s 14A - computation of expenditure required to be disallowed for earning tax free income - HELD THAT:- Case of the assessee was that it has earned exempt income without incurring any expenditure, as the assessee has sufficient interest free funds available with it for making investment, and some of these investments are in the nature of strategic for the purpose of the business. CIT(A) in the impugned order has recorded a finding that investment in shares of ₹ 38.9 crores against which the assessee has share capital of ₹ 24.5 cores and reserves and surplus of ₹ 262.6 crores, and therefore, the assessee has sufficient interest free funds available with for making this much investment. Undisputedly, before us, the ld.DR could not show that the amount of investment made by the assessee in those investments, which earned tax-free income, is higher than the amount of share capital and free reserve available with the assessee, nor could show that borrowed funds were utilised so as to invoke the provisions of section 14A of the Act, therefore, we do not find any infirmity in the order of the ld.CIT(A) in deleting the disallowance on account on interest expenditure. Disallowance of administrative expenses - At the end of the assessee, neither before the AO nor before the CIT(A) nor before the ITAT, it has been demonstrated that a particular amount of expenditure were incurred or sufficient for earning that tax free income. The assessee failed to submit details of investment and as to how those details/investments have been taken care of; whether any employees are devoted towards keeping track of the investment or not. Investment of this much size, does require constant monitoring. It is quite impossible that a tax free income of ₹ 1,42,19,234/- generated to the assessee without incurrence of any energy from the work force. Therefore, we find that in the compelling circumstances, the ld.CIT(A) has taken a shelter by invoking Rule 8D of the Income Tax Rules. Assessee has relied upon the order of the Tribunal in earlier years, wherein according to it, under similar circumstances, disallowances have been deleted. It is pertinent to observe that in the written submissions, no parity of circumstances has been highlighted. The magnitude of exempt income, cost of employees in terms of tracking quantum of investment etc. have not been filed, nor is discernible from order of the Coordinate Bench cited by the assessee. In this view of the matter, we do not find any infirmity in the order of the ld.CIT(A) on this issue, which is upheld, and this ground of assessee is rejected. Confirmation of addition on account of deemed house property income - HELD THAT:- We find that the assessee has not filed evidence to prove its claim that the impugned flats were utilized for the purpose of business as guest house. The Revenue authorities have considered two flats out of four to be used for the business purpose, and in respect of remaining two flats notional income was calculated at the rate of ₹ 90,000/- per flat, and thus made addition of ₹ 1,80,000/- under the head “income from house property”. Before us also, there is no material putforth by the assessee to substantiate its claim. Similar claim of the assessee for the preceding two assessment years i.e. 2011-12 and 2012-13 was rejected upto the Tribunal by holding that there was any material produced by the assessee demonstrating that properties were utilized for the purpose as guest; so was the situation before us also. This being so, in the year under our consideration, we do not find any infirmity in order of the ld.CIT(A) confirming the addition made by the AO in respect of deemed rental income. Thus, order of the ld.CIT(A) on this issue confirmed. Deduction claimed under section 80IA - HELD THAT:- Assessee has claimed the impugned deduction from the assessment year 2009-10, and upto 2014-15 and such claim was allowed either at the end of the first appellate authority or at the end of the Tribunal. The submissions of the assessee were not disputed by the ld.DR, however, the Revenue is constantly challenging this issue year after year, despite clear cut stand taken by the Tribunal in favour of the assessee in this behalf. Admittedly, there is no change in the facts and circumstances, and therefore it is not appropriate for us to revisit eligibility of claim more so when, for the aforesaid reasons. Assessee has placed on record copies of orders of the Tribunal passed in favour of the assessee in the earlier years. Accordingly, we reject this ground of the Revenue. Disallowance made u/s.14A restricting calculation of book profit under section 115JB - HELD THAT:- We find that the issue is covered in favour of the assessee by the decision of Special Bench in the case of ACIT Vs. Vireet Investments P.Ltd [2017 (6) TMI 1124 - ITAT DELHI] wherein it is held that no increase or decrease can be effected in the book profit calculated under section 115JB on account of certain disallowance made under section 14A.
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