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2015 (10) TMI 1862 - ITAT HYDERABAD

2015 (10) TMI 1862 - ITAT HYDERABAD - TMI - Disallowance under S.14A read with Rule 8D - expenditure incurred towards earning of exempt income - whether the CIT(A) is correct in directing that the assessee will not be entitled to capitalize the amount of ₹ 2,41,51,811 in future and also will not be eligible for depreciation on such amount - Held that:- once the expenditure claimed is disallowed, the same cannot be capitalized by the assessee. Therefore, we do not see any serious infirmity .....

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e amount to be disallowed by taking into consideration income shown by the assessee of ₹ 75,49,010. The assessee’s appeal is accordingly allowed to that extent - Decided partly in favour of assessee. - ITA No.1573/Hyd/2014 - Dated:- 19-6-2015 - SHRI B. RAMAKOTAIAH AND SHRI SAKTIJIT DEY, JJ. For The Appellant : Shri A.Siva Kumar For The Respondent : Smt. Amisha S.Gupt, DR ORDER Per Saktijit Dey, Judicial Member : Instant appeal of the assessee is against the order dated 24.6.2014 of learned .....

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aring on merit. 2. The only effective ground raised by the assessee reads as under by- 1. …. 2. The Commissioner of Income-tax(Appeals) grossly erred in holding that interest of ₹ 2,41,59,811/- is not entitled to be capitalised and will not be entitled to depreciation thereon in subsequent years when such issue is not there before her. 3. …… 3. Briefly the facts relating to the issue in dispute are : The assessee a company is engaged in the business of setting up a 330 .....

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e relevant previous year, which has been claimed as exempt from tax. The Assessing Officer observed that as per the provisions of S.14A read with Rule 8D of the Income-tax Act and Rules, expenditure incurred for earning such exempt income is required to be disallowed. Accordingly, in terms of Rule 8D of the Income-tax Rules, the Assessing Officer disallowed an amount of ₹ 2,41,59,811 and added it back to the income of the assessee for the year under consideration. 4. Being aggrieved of suc .....

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on which dividends were received. It was submitted that since the assessee during the year has not claimed any expenditure and no Profit and Loss Account was drawn up, no disallowance can be made under S.14A read with Rule 8D. The learned CIT(A), after considering the submissions of the assessee held as under- 4.4. The details on record are carefully considered. It is an admitted fact that certain loans were availed by the assessee and as the loans could not be utilised immediately, the funds we .....

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tion thereon in subsequent years. Therefore, this ground of appeal is partly allowed. Aggrieved by the above order of the learned CIT(A), assessee is in second appeal before us. 5. The learned Authorised Representative submitted before us that the assessee has neither claimed any expenditure the year nor has capitalized the interest expenditure. It was submitted that on the other hand, the assessee has reduced an amount of ₹ 74,95,703 being interest earned on fixed deposits as well as an a .....

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learned CIT(A) that he has set off an amount of ₹ 75,49,010 shown as income from other sources as well as short term capital gains against the interest expenditure. Thus, it was submitted that since such fact has been brought to notice for the first time before the Tribunal, it has to be verified by the Assessing Officer. 7. We have considered the submissions of the parties and perused the orders of the Revenue authorities and relevant material on record. The Assessing Officer has disallow .....

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