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2022 (9) TMI 1090 - AT - Income TaxRevision u/s 263 by CIT - as per CIT, AO has failed to make adequate inquiry w.r.t. to section 14A disallowance and merely accepted assessee's submission - whether the AO made inquiries in respect of deduction of claim under section14A of the Act during the course of assessment proceedings? - HELD THAT:- Before the AO, the assessee submitted that the assessee had interest-free capital of the proprietor amounting to ₹ 1,53,73,45,614/- as on 31-03-2017. Out of the same, the total investment in interest free funds is amounting to Rs. 7,71,58,852/-. Therefore, considering the investment in the firms from which tax free income is earned, it is just 5% of the total interest-free capital of the proprietor. Further, the assessee submitted that there is no interest-bearing loan in the personal balance sheet of the assessee. Therefore, the assessee submitted before the AO that no interest-bearing funds were utilised in the investment which generated interest-free income in the hands of the proprietor. It was further submitted that there is no new investment during the year under consideration with reference to investment generating exempt income. Therefore interest or other expenses incurred during the year under consideration cannot be directly or indirectly related to exempt income, as no new fund has been invested for the investment generating exempt income. As in the instant set of facts, the assessee gave detailed explanation in respect of its claim u/s 14A of the Act. The assessee placed various documents on record to substantiate that since he was having adequate interest-free funds at its disposal, then in view of several jurisdiction Gujarat High Court decisions, it would be reasonable to presume, that interest-bearing funds were not utilised the purpose of making investments in instruments which will yield interest free income. In view of the explanation given by the assessee with respect to claim of deduction u/s. 14A of the Act, in our view, the view taken by the A.O. is a legally plausible view. It is a well settled position of law that if from the assessment records, it is evident that the Ld. AO has made due enquiries in response to which assessee has filed detailed submissions, then even if the assessment order does not discuss all aspects in detail with regards to claim of the assessee, it cannot be held that the order is erroneous and prejudicial to the interests of the Revenue. See M/S RELIANCE COMMUNICATION LTD. [2016 (4) TMI 173 - BOMBAY HIGH COURT], SMT. ANUPAMA BHARAT GUPTA [2021 (4) TMI 1000 - ITAT AHMEDABAD], GOYAL PRIVATE FAMILY SPECIFIC TRUST [1987 (10) TMI 43 - ALLAHABAD HIGH COURT] - Appeal of assessee allowed.
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