TMI Blog2014 (1) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue could not bring any material on record to controvert the findings of CIT(A) – there was no reason to interfere the order of CIT(A) – Decided against Revenue. - I.T. A. No. 2228/AHD/2012 - - - Dated:- 5-7-2013 - Mukul Kr Shrawat And Anil Chaturvedi, JJ. For the Appellant : Shri T Sankar Sr (DR) For the Respondent : Shri S N Divetia (AR) ORDER:- PER : Anil Chaturvedi This appeal is filed by the Revenue against the order of CIT(A)- VIII, Ahmedabad dated 12.07.2012 for A.Y. 2008-09 2. The facts as culled out from the order of lower authorities are as under. 3. Assessee is a company engaged in the business of Finance. It electronically filed its return of income on 25.08.2008 declaring total income at Rs. NIL af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of Assessment proceeding, the Assessing officer noticed that the appellant had made investment in shares amounting to Rs.95,45,400/- so that disallowance of expenses was required to be made in view of section 14A of the Act in respect of interest expenses and administrative expenses the AO has worked out the disallowance of Rs. 15,63,883/- as per Rule 8D. The appellant has submitted that he has claimed only Rs. 300 as exempt income i.e. Dividend Income and it is submitted that no direct/indirect expenditure has been incurred to earn the exempt income. The appellant has submitted that the dividend generally received through ECS and no specific expenditure incurred for collecting and depositing the said dividend in bank, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only Rs. 3,26,722/-. In such a situation where appellant has net interest expenditure only of Rs. 3,26,722/-, the disallowance of gross interest is not justified. The case of Hero Cycles Ltd. (P H) 323 ITR 22 supports this contention. In view of all the facts mentioned above the disallowance us/ 14A has calculated and submitted by the appellant above of Rs. 40769/- is confirmed. The remaining addition Rs. 494132/-is deleted." Therefore, in light of the above discussion, I am of the opinion that there was no nexus that could be established with the amounts incurred by the assessee for earning the tax free income. The appellant is also having net positive interest income which cannot be part for the disallowance in view of the basis o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore no disallowance under 14A can be made. The learned A.R. further submitted that the Assessee has received dividend of Rs. 300 which has been received through ECS and no specific expense has been incurred for collecting and depositing the dividend. He thus supported the order of CIT(A). 7. We have heard the rival submissions and perused the material on record. We find that CIT(A) while granting relief to the Assessee has given a finding that no nexus has been established by the A.O. with the amount incurred by the Assessee for earning the tax free income. He has further noted that in the Assessee s case the interest income was more than interest expense and thus the Assessee was having net positive interest income and therefore the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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