TMI Blog2014 (3) TMI 847X X X X Extracts X X X X X X X X Extracts X X X X ..... r under consideration – Relying upon CIT v. Gujarat State Fertilizers & Chemicals Ltd. [2013 (7) TMI 701 - GUJARAT HIGH COURT] – no substantial question of law arises for consideration – Decided against Revenue. - TAX APPEAL No. 1151,1152 of 2013 - - - Dated:- 10-1-2014 - AKIL KURESHI AND SONIA GOKANI, JJ. For the Appellant : K.M. Parikh For the Respondent : Manish J. Shah ORDER :- PER : Ms. Sonia Gokani These Tax Appeals preferred under section 260A of the Income-tax Act, 1961 ( Act for short) challenges the common Order of the Income Tax Appellate Tribunal, Ahmedabad ( Tribunal for short) rendered in ITA No. 2025/Ahd/2010 for A.Y 2001-02 and ITA No. 2026/Ahd/2010 for A.Y 2002-03, proposing the following substa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies. 3.2 The additions made by the Assessing Officer have been set-aside by the Tribunal in the first round and the matter was remanded back to the Assessing Officer for re-consideration. 3.3 In the second round, it was submitted on the part of the assessee that the investment made in UTI and the share of domestic companies made in the earlier years and no fresh investments were made in the year under consideration and the expenditure was made for earning dividend income. Moreover, it was further contended that there was no nexus between interest bearing borrowings and investment from which exempt income is earned. The company had huge share capital, reserves and surpluses which do not carry any interest. Therefore, it was urged that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT [A] and Tribunal are challenged before us, raising aforementioned questions of law. 8. We have extensively heard Mr. K.M Parikh, learned counsel for the appellant-Revenue and learned advocate Shri Shah appearing for the Caveator. 9. We could notice from the material on the record that both the authorities have correctly approached the issue in as much as the record clearly had reflected from the balance sheet of the assessee-company that the interest free funds available was much larger to the extent of Rs. 84,45,567/= lakhs as compared to the investment which was only Rs. 22.707 lakhs. Both the authorities have also noted faultnessly that the dividend income which was earned out of the investments made in the earlier years and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have correctly approached the issue by setting aside the order of disallowance under Section 14A of the Act in respect of interest expenditure. When the very basis for employing Section 14A of the Act on factual matrix is lacking, the disallowance to the extent of 10% of dividend income was not permissible. When it transpires from record that the assessee's own funds were at higher than the investment made by it and with nothing to indicate that the borrowed funds were utilized for the purpose of investment in shares and for earning dividends, the Tribunal committed no error in disallowing the sum of Rs.1,14,43,040/-. 10. These Tax Appeals since raise no question of law any further, the same deserve no consideration. Tax Appeals are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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