Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (8) TMI 620 - AT - Income TaxAddition u/s 14A - interest expenses addition - Sufficiency of own funds - HELD THAT:- As in case of Gujarat Fluoro chemicals Ltd.[2020 (10) TMI 252 - GUJARAT HIGH COURT] reiterated that where interest free funds available with assessee were far more than gross investment, it could safely be harboured that interest bearing funds was not invested by assessee and, thus, no disallowance under section 14A to be made. In view of the consistent position taken by the Gujarat High Court, as applied to the facts instant case, in our considered view, no disallowance is called for in respect of interest expenses under section 14A when the assessee is having sufficient interest-free funds at the disposal in excess of investment made in instruments yielding exempt income. Disallowance of administrative expenses - As quantification was not permissible under rule 8D for the impugned assessment year, the disallowance had to be made on the basis of reasonableness and fairness. The Mumbai ITAT in the case of Taj Sats Air Catering Ltd. [2012 (4) TMI 305 - ITAT MUMBAI] held that where assessee had not allocated any expenditure for earning interest free dividend income, reasonable disallowance was justified. The Ahmedabad in the case of Sun Pharmaceutical Industries Ltd.[2017 (6) TMI 1323 - ITAT AHMEDABAD] directed the A.O. to compute the disallowance for administrative expenditure as per the formula given under Rule 8D We are of the considered view that Ld. CIT(Appeals) has not erred in facts and in law in confirming disallowance in respect of administrative expenditures and directing the A.O. to compute the disallowance for administrative expenditure made by the AO as per the formula given under Rule 8D.
|