TMI Blog2015 (1) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments showing the deduction claimed to be made by Discoms on account of penalty for late delivery, were not furnished by the assessee and also relying on Explanation to S.37(1) of the Act - the assessee furnished such details and documents before the CIT(A) - But on verification of the details and documents, the AO found that the claim of the assessee for deduction on account of late delivery charges was established only to the extent of ₹ 1,78,62,107 - As regards the balance amount of ₹ 51,79,590, the required details and documents, however, were not furnished to substantiate its claim, as specifically noted by the Assessing Officer in the remand report - CIT(A) should not have deleted the entire disallowance made by the AO on account of sundry balances written off - the onus is on the assessee to establish its claim for the deduction made by the Discoms on account of late delivery charges, even for the balance amount of ₹ 51,79,590 – thus, the matter is remitted back to the AO to file the relevant details and documents to substantiate its claim for deduction on account of late delivery charges claimed to be levied by Discoms to the extent of balance amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share application money of ₹ 29.52 crores from M/s. VTSL, which was directly paid by the said party to HHEL. It was also submitted that similarly a sum of ₹ 0.70 crores on account of loan from V.Mahindra which was directly paid to HHEL. As regards the balance amount of ₹ 2.40 crores, it was submitted that the said amount was directly paid by the assessee out of its internal accruals. Taking into consideration this explanation offered by the assessee, the learned CIT(A) held that the share application money of ₹ 29.52 crores and unsecured loan of ₹ 0.70 crores represented interest free funds available with the assessee company and therefore, no disallowance under S.14A relatable to the investment made in shares of HHEL to that extent could be made under S.14A. As regards the balance amount of ₹ 2.40 crores, the learned CIT(A) did not accept the explanation of the assessee that the same was directly paid out of its internal accruals, as the assessee could not substantiate the same. Accordingly, he directed the Assessing Officer to restrict the disallowance under S.14A only to the extent of expenses attributable to the investment made in the shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because if the investment in shares is found to be made by the assessee out of its own funds or interest free funds, the disallowance under S.14A to that extent cannot be made even as per the method prescribed in Rule 8D. Since the investment in the shares to the extent of ₹ 30.22 crores was made by the assessee out of interest free funds, such as share application money received form VTCL and unsecured loan received from Shri V.Mahindra, we find no infirmity in the impugned order of the learned CIT(A), deleting the disallowance made under S.14A to the extent it was relatable to the investment of ₹ 30.22 crores made in the shares of HHEL. We therefore, find no merit in ground No.2 raised by the Revenue and dismiss the same accordingly. 9. In Ground No.3, Revenue has challenged the action of learned CIT(A) in deleting the disallowance made by the Assessing Officer on account of sundry balances written off to the full extent, instead of sustaining the same to the extent of ₹ 51,79,590. 10. In the Profit Loss Account filed alongwith the return of income, sundry balances amounting to ₹ 2,30,41,697 were written off by the assessee. Before the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... written off for the following reasons given in paragraph 8.3 of her impugned order. 8.3 I have considered the facts on record and the submissions of the Assessing Officer and the AR. The penalty which have eventually have debited as sundry balances written off was levied for delay in delivery of transformers by the appellant to the discoms. The delay in delivery of goods cannot be considered to be an infraction of law, merely because the customer happened to be government organizations. As pointed out by the appellant, the Assessing Officer has also accepted the claim in principle. That being so the claim cannot b disallowed merely because the appellant has not furnished the details of payments against the bills raised by it. The disallowance is therefore directed to be deleted. 13. We have heard the arguments of both the sides and also perused the relevant material on record. It is observed that the disallowance on account of sundry balances written off was made by the Assessing Officer on the basis that the relevant details and documents showing the deduction claimed to be made by Discoms on account of penalty for late delivery, were not furnished by the assessee and also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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