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2021 (5) TMI 157 - ITAT MUMBAIDisallowance u/s 14A r.w.r. 8D - HELD THAT:- So far as the source of investment up-to AY 2011-12 is concerned, it is the consistent finding of the Tribunal that the assessee had surplus interest free funds to make the investments. As per the observation of Ld. CIT(A), there are fresh investment of ₹ 183 Lacs during the year which could be said to have been sourced out of borrowed funds. However, we find that no such nexus has been established by Ld. AO during assessment proceedings. Another pertinent fact is that own interest free funds far exceeds the investments made by the assessee and therefore, the presumption as drawn in earlier years would still prevail that the investments were sourced out of interest free funds and not out of borrowed funds unless the nexus between the two was established and brought on record by Ld. AO. In the absence of such nexus, the interest disallowance would not be sustainable in law. Therefore we are inclined to delete the interest disallowance made u/r 8D(2)(ii). So far as expenses disallowance u/r 8D(2)(iii) is concerned, Ld.AO is directed to re-compute the same after considering only those investments which have yielded exempt income during the year. Adjustment of disallowance u/s 14A while computing book profits u/s 115JB - HELD THAT:- The matter would stand restored back to the file of Ld. AO on similar lines as directed by Tribunal in order for AY 2010-11 [2019 (8) TMI 1694 - ITAT MUMBAI]. The operative portion has already been extracted by us in preceding paragraphs. Depreciation claim on assets given on finance lease - claim was rejected By Ld. AO since the new claim could be made only by revising the return of income - Ld. Sr. Counsel, submitted that the income from the leased assets was specifically mentioned in the respective agreements and the same has been offered as well as assessed as ‘Business Income’. This being the case, the assessee would be eligible for the depreciation - HELD THAT:- Upon due consideration of factual matrix, finding strength in arguments of Ld. Sr. Counsel, we are of the considered opinion that correct factual matrix is required to be brought on record. Needless to add that if the income has been offered and assessed as ‘Business Income’, the assessee would be eligible to claim the depreciation. Therefore, the impugned order, on this issue is set-aside and the issue is restored back to the file of Ld. AO for fresh adjudication after appreciating the correct facts. - Ground stand allowed for statistical purposes.
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