Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (10) TMI 763 - AT - Income TaxDisallowance u/s.14A r.w.r.8D - AR submitted has sufficient cash profits available with the assessee for making investment in shares - HELD THAT:- We find substance in the claim of the Ld. AR that now when the assessee company had not received any exempt dividend income during the year under consideration, therefore, no disallowance u/s.14A of the Act was warranted in its case. Alternatively, there is substance in the claim of the Ld. AR that now when the interest free funds available with the assessee were in excess of the exempt income yielding investments, therefore, no disallowance of any part of the interest expenditure could have been made in its hands. Our aforesaid view that when interest free funds and interest-bearing funds are available, then, a presumption would arise that the interest free advances have been given out of interest free funds is supported by the judgment of the Hon’ble Supreme Court in the case of South Indian Bank Ltd. [2021 (9) TMI 566 - SUPREME COURT] Rejection of the books of accounts u/s.145(3) - GP estimation - CIT(Appeals) vacating the addition made by the A.O by substituting the yield of 85% in the SMS division of the assessee company, by that as was adopted by his predecessor i.e at 89% while framing the block assessment in the case of the assessee for A.Y. 2006- 07 to A.Y.2011-12 and A.Y.2012-13 - HELD THAT:- As held by the CIT(Appeals) and, rightly so, the books of account of the assessee could not have been validly rejected by the A.O u/s.145(3) of the Act for the reason that the profit of the assessee had witnessed a decline as in comparison to the preceding years - We concur with the view taken by the CIT(Appeals) that now when no irregularity or defect had been pointed out by the A.O in the books of account of the assessee, bills and vouchers and other documentary evidences pertaining to the year under consideration, therefore, there was no justification for him to have rejected its books of account u/s.145(3) of the Act, for the standalone reason that its GP rate had witnessed a decline as in comparison to the preceding years. Also, as observed by the CIT(Appeals) and, rightly so, as the assessee company being an excisable unit was regularly filing its excise and VAT returns, therefore, rejection of its duly audited books of account without pointing out any defect or irregularity by the A.O does not merit acceptance. We are of the considered view that now when the adoption of yield in the SMS division at 89% by the A.O during the year under consideration i.e A.Y 2013-14 was in itself based on the view that was taken by his predecessor while framing the block assessment in its case for A.Y.2006-07 to A.Y.2011-12 and A.Y.2012-13, which had been vacated by the CIT(Appeals) and the same thereafter had been upheld by the Tribunal [2021 (11) TMI 708 - ITAT RAIPUR] therefore, there remains no basis for sustaining the aforesaid view of the A.O during the year under consideration. CIT(Appeals), who in our considered view had rightly vacated the rejection of the books of accounts of the assessee by the A.O u/s.145(3) of the Act, as well as had rightly set-aside the adoption of yield in SMS division of the assessee company at 89% as against that disclosed by the assessee company on the basis of its duly audited books of accounts for the year under consideration at 85%. Thus, the Grounds of appeal No.(s) 1 & 2 raised by the revenue are dismissed.
|