TMI Blog2014 (1) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... could not furnish any evidence to show that interest bearing funds were utilised for the purpose of making investments to earn tax free income – Decided against Revenue. Deletion made in respect of guarantee commission – Held that:- The Bench called upon the assessee to furnish the agreements which gave rise to commission in the year under consideration, i.e. for A.Y. 2001-02 and also the agreements for subsequent two years so that it can be compared and if the conditions are the same the order or the Tribunal as well as the order of the Hon'ble High Court can be followed - Copies of the agreements were not immediately available with both the parties – Matter remitted back to the AO to verify the agreements – Decided partly in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000-01. The only ground urged by the Revenue reads as under: - "1. On the facts and in the circumstances of the case and in law, the LD. CIT(A) erred in holding that there is no nexus between tax free income and interest bearing funds and thus the AO is not correct in disallowing Rs.82,69,047/- as interest expenditure incurred for earning dividend on shares on the ground that only the net dividend income from shares is eligible for exemption." 3. It may be noticed here that the AO, in para 4.14, sought to disallow only interest expenditure attributable to earning tax free income. The learned CIT(A) observed that identical issue had come up before him for A.Y. 1998-99 wherein there was a categorical finding that no nexus has been proved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Following two grounds were urged by the Revenue: - "1. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing to delete the addition of Rs.67,63,204/- made in respect of guarantee commission. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing to delete the disallowance made under section 10(33) of Rs.10,58,121/-." 7. Ground No. 2 is identical to the ground urged in the appeal for A.Y. 2000-01. The facts and circumstances being identical, we do not find any infirmity in the order passed by the CIT(A) on this issue and, therefore, we dismiss ground No. 2 of Revenue. 8. With regard to ground No. 1 the case of the Revenue is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon the learned counsel for the assessee to furnish the agreements which gave rise to commission in the year under consideration, i.e. for A.Y. 2001-02 and also the agreements for subsequent two years so that it can be compared and if the conditions are the same the order or the Tribunal as well as the order of the Hon'ble High Court can be followed. Copies of the agreements were not immediately available with both the parties. Therefore, in the interest of justice we set aside this issue to the file of the AO who is directed to verify the agreements and if it can be culled out that the agreement(s) for the year under consideration are akin to the agreement under which the appeals were decided by the ITAT "L" Bench Mumbai in assessee's own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee submitted that there are few decisions of the ITAT wherein a contrary view was taken, the learned counsel did not place before us any order in that regard. The learned CIT(A) followed the decision of the ITAT "F" Bench Mumbai wherein identical issue was considered and decided in favour of the Revenue. 12. Having regard to the circumstances of the case we do not find any infirmity in the order of the CIT(A) and, therefore, reject ground No. 1 of the assessee. 13. Vide ground No. 2 the assessee contends that the AO erred in taxing the interest paid to the head office/overseas branches amounting to Rs. 2,21,01,800/- as interest income in their hands, as per Article 12 of the Treaty. 14. At the time of hearing the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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