9911796707
TMI Blog2014 (7) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee electronically filed its return of income for .AY. 07-08 on 27.10.2007 declaring total income of Rs. 5,09,50,120/-. The case was selected for scrutiny and thereafter the assessment was framed u/s. 143(3) vide order dated 11.12.2009 and the total income was determined at Rs. 5,13,37,044/-. Aggrieved by the order of A.O, Assessee carried the matter before CIT(A). CIT(A) vide order dated 02.02.2011 dismissed the appeal of the Assessee. Aggrieved by the order of CIT(A), Assessee is now in appeal before us and has raised the following grounds:- 1. Ld. CIT (A) has erred in law and on facts in confirming disallowance of Rs. 2, 72, 587/- made by AO u/s 14A of the Act. Ld. CIT (A) further erred in confirming the computation of disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore CIT(A). CIT(A) confirmed the order of A.O by holding as under:- 2.3 I have considered the facts of the case, assessment order and appellant's submission. It is not in dispute that appellant earned exempt income in the form of dividend on investment of more than RS 1.15 crores. It is also not in dispute that appellant borrowed funds on which interest to the extent of RS 50.76 lakhs were paid. Apart from this substantial administrative expenses were incurred, part of which may relate to investment resulting in exempt income. Considering these facts it is clear that there are expenses in the form of interest and other administrative expenses relatable to earning of exempt income which are to be disallowed under section 14 A. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as per rule 8D is confirmed. 5. Aggrieved by the order of CIT(A), Assessee is now in appeal before us. 6. Before us, ld. A.R. submitted that the provisions of Rule 8D are not applicable for the year under consideration in view of the decision of Hon'ble Bombay High Court in the case of Godrej & Boyce Ltd. 328 ITR 81 (Bom). She further submitted that Assessee was having sufficient interest free funds in the form of share capital and reserves and surplus and the same were far in excess of the investments and therefore the presumption was that no interest bearing funds have been used for making investment. She placed reliance on the decision of Hon'ble Gujarat High Court in the case of CIT vs. Amod Stamping Pvt. Ltd. (2014) 45 Taxman.com. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not an appeal, we are of the view that in the present case no further disallowance over and above then what is made by the Assessee u/s. 14A read with Rule 8D is called for. In the result, the appeal of Assessee is allowed. Ground No. 2 is with respect to disallowance of Rs. 47,403/- 8. Before us, ld. A.R. at the outset submitted that on account of delay in payment of Employees share of Contribution to ESIC, the amount was considered as taxable u/s. 2 (24)(x) read with Explanation to Section 36(1)(va) by the A.O. She fairly conceded that this ground has to be decided against the Assessee in view of the decision of Hon'ble Gujarat High Court in the case of Gujarat State Road Transport Corporation. The ld. D.R. did not object to the submis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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