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TMI Blog2010 (10) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 2. These are the appeals against the order passed by the learned CIT(A) on 17.01.2008 pursuant to the original assessment made u/s.143(3). Filtering out unnecessary details it is seen that the Assessing Officer made addition u/s.14A in respect of interest and administrative expenses. The learned CIT(A) granted relief of Rs.30.47 crores out of disallowance of interest amounting to Rs.33.39 crores. At the same time he confirmed the disallowance of administrative expenses amounting to Rs.2.91 crores. Both the sides are in appeal against their respective stands. 3. We have heard the rival submissions and perused the relevant material on record. It is noted that the question of making disallowance u/s 14A is no more res integr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onds of Reliance Infocomm Limited and against confirmation of disallowance of Rs.2,48,82,480 u/s.14A considering premium on redemption of non-convertible debentures paid during the year as part of finance cost. Both the sides are in agreement that the facts and circumstances of the assessee's appeal need fresh decision by the A.O. in the light of the judgement of the Hon'ble Bombay High Court in Godrejand Boyce Limited (supra). We order accordingly. Insofar as the Revenue's ground is concerned, the learned A.R. pointed out that the A.O. has recorded a finding that only interest bearing funds used for ICD - RPL amounting to Rs.96.43 lakhs which were repaid on 12.10.2001 and hence interest to be considered for the period 3.10.2001 to 12.10.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly. 9. Ground no.2 of the assessee's appeal about the confirmation of addition of Rs.6.01 crores to the book profit computed u/s.115JB being expenses disallowed u/s.14A was not pressed by the learned A.R., as having become academic. This ground is dismissed. 10. Last ground of the assessee's appeal is against the confirmation of addition of Rs.2,76,98,548 being interest on income-tax refund for assessment year 2001- 2002 granted vide Intimation u/s.143(1) of the Act to the assessee in this year. The learned A.R. fairly conceded that the issue in this ground is covered by the Special Bench order in Avada Trading Co. Pvt. Ltd. vs. ACIT [(2006) 100 ITD 131 (Mum.) (SB)]. The learned Departmental Representative relied on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s.154 to the extent of reduction in such interest due to assessment u/s.143(3). 12. In the result, the appeal of the Revenue in full and that of the assessee in part are allowed for statistical purposes. Asst. Year 2004-2005 : ITA Nos. 2154 and 3036/Mum/2008 13. First ground of the Departmental appeal is against the deletion of addition of Rs.45.55 crores made by the A.O. u/s.14 of the Act. The assessee vide its first ground is aggrieved against the confirmation of disallowance of administrative expenses u/s.14A amounting to Rs.3.75 crores. Both the sides are in agreement that this issue now needs reconsideration at the end of the Assessing Officer in view of the judgement of the Hon'ble jurisdictional High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oing life insurance business. The assessee's group is carrying general insurance business and the main activity of the assessee is that of financing. The Hon'ble Supreme Court in the case of S.A.Builders Ltd. vs. CIT [(2007) 288 ITR 1 (SC)] has held that wherein interest bearing funds are lent to the sister concern without interest, the A.O. needs to examine the purpose of loan. If the loan is advanced for commercial expediency and not utilized by the Directors of the sister concern for their personal benefit, then the deduction of interest has to be allowed. In our considered opinion, the learned CIT(A) has rightly relied on this judgement in deleting this addition. We, therefore, uphold the order on this score. 17. In the result, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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