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2015 (10) TMI 1270

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..... 3(3), the AO had made detailed discussion in the assessment order for making disallowance u/s14A for an appropriate amount. The AO has specifically mentioned in the table reproduced at page 4 of the assessment order that expenditure by way of interest was allowable. Thus, in our considered view, the AO has taken the view after considering all the factual submissions and replies and evidences filed by the assessee and after considering the judgment of Hon’ble Jurisdictional High Court in the case of Godrej Boyce Manufacturing Co. Ltd. vs. CIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] and judgment of Special Bench of ITAT Mumbai in the case of Cheminvest Ltd Vs. ITO [2009 (8) TMI 126 - ITAT DELHI-B ] AO made disallowance of an aggregate amount of ₹ 4,49,516/- u/s 14A r.w.r 8D. Ld CIT DR could not point out anything wrong in appreciation of the facts by the AO. Thus, in our considered opinion, view taken by the AO was one of the possible views as per law and facts and therefore, Ld. CIT could not have exercised jurisdiction u/s 263 to set aside the assessment order passed u/s 143(3). Also it has been shown by ld. Counsel, on the basis of material on record, that loan from HDFC Ba .....

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..... 36(1 )(iii) of the Income Tax Act, 1961 when interest free funds were advanced by appellant without appreciating that full details of interest free advances were called for by the assessing officer and examined by him while allowing interest expenditure to the appellant. ii. assessing officer ought to have considered the interest expenditure directly attributable to taxable business income for disallowance u/s. 14A of the Act read with rule 8D(2)(ii) even when the assessing officer formed his view to not include the same while calculating disallowance u/s. 14A r.w.r 8D. 3. The appellant craves leave to add, alter, amend or delete any of the above referred ground of appeal. 2. The Brief facts are that the assessee company filed its return of income for A.Y. 2009-10 on 29.09.2009. Thereafter, the AO passed assessment order u/s 143(3) order dated 16.09.2011. Subsequently, the Ld. CIT issued show cause notice u/s 263 on 25.05.2012 to the assessee proposing for revision of the aforesaid assessment order, u/s 263 of the Act, on the ground that it was observed by the Ld. CIT on the perusal of records, that balance sheet of the assessee company revealed that the assessee has adv .....

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..... ll into grave error by not appreciating the facts correctly and committed a mistake by not appreciating the fundamental facts that own funds of the assessee were far in excess of amount of advance given, and in the given facts no disallowance was called for either u/s 14A or any other provision more so, in view of the judgment of jurisdictional High Court in the case of CIT vs. Reliance Utilities Power Limited 313 ITR 340 (BOM). It was submitted that assessment order passed by the AO was very much in accordance with law, as explained by Hon ble jurisdictional high court. It was further submitted by the Ld. Counsel that detailed examination has already been done by the AO in the original assessment order passed u/s 143(3), wherein this aspect has been examined and discussed by the AO in the assessment order passed. Few other submissions were also made by the Ld. Counsel to assail the order of Ld. CIT. In nutshell, it was argued by the Ld. Counsel that the assessment order passed u/s 143(3) was factually correct and neither it was erroneous nor prejudicial to the interest of the revenue, and more so, when one of the possible views was taken by the AO after making detailed examinati .....

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..... umstances of the case, the AO made disallowance of an aggregate amount of ₹ 4,49,516/- u/s 14A r.w.r 8D. Ld CIT DR could not point out anything wrong in appreciation of the facts by the AO. Thus, in our considered opinion, view taken by the AO was one of the possible views as per law and facts and therefore, Ld. CIT could not have exercised jurisdiction u/s 263 to set aside the assessment order passed u/s 143(3). We derive support from the judgment of Hon ble Jurisdictional High Court in the case of CIT v. Gabriel India Ltd. 203 ITR 108 (Bom) and Sunbeam Auto Ltd. 332 ITR 167 (Delhi). 7. In addition to this, it is further noted by us that on facts also Ld. CIT has committed an error. It has been shown by ld. Counsel, on the basis of material on record, that loan from HDFC Bank was specifically taken by the assessee for the purpose of procuring raw material i.e. Castor Seeds. This fact is cross verified with the help of sanction letter of the said bank enclosed at page 54 of the paper book. This vital fact has been accepted by the Ld. CIT at page 9 of the impugned order passed u/s 263 of the Act. Once this fact is on record and stands uncontroverted till date, then it can b .....

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