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PR. Commissioner of Income-Tax-4 Versus M/s Transformers And Rectifiers (India) Ltd.

2015 (12) TMI 197 - GUJARAT HIGH COURT

Disallowance u/s 14A - Held that:- Commissioner (Appeals) has restricted the disallowance under section 14A to 0.5% of value of investments. The Tribunal has concurred with the above findings of fact recorded by the Commissioner (Appeals). Evidently, therefore, the conclusion arrived at by the Tribunal is based upon concurrent findings of fact recorded by it upon appreciation of the material on record. On behalf of the revenue, nothing contrary has been brought to the notice of the court to disl .....

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Hence, ADMIT. The following substantial question of law arises for consideration:

"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in upholding the order passed by the Commissioner of Income Tax (Appeals) deleting the disallowance of expenditure of ₹ 30,73,341/- covered under section 40A(2)(a) of the Income Tax Act, 1961?" - Tax Appeal No. 662 of 2015 - Dated:- 19-10-2015 - Harsha Devani And A. G. Uraizee, JJ. For the .....

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ntial questions of law: "(a) Whether in the facts and circumstances of the case, the learned ITAT has erred in law and on facts in confirming the order of CIT(A) restricting the disallowance of ₹ 8,53,971/- made by the Assessing Officer under section 14A of the Income Tax Act to the extent of ₹ 42,423/- ? (b) Whether in the facts and circumstances of the case, the learned ITAT has erred in law and on facts in upholding the order of CIT(A) deleting the disallowance of expenditure .....

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the assessee that there are sufficient interest free funds for investment in tax free securities as in his opinion such investments reduce the availability of liquid funds with the company, which many a times creates the need for borrowed funds. According to the Assessing Officer if such funds had not been diverted for such investment, the need for interest bearing funds would have been much less. Moreover, the management and maintenance of such investments always entail certain administrative e .....

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rom ₹ 8,53,917/- to ₹ 42,423/-. The revenue carried the matter in appeal before the Tribunal but did not succeed. 3. Mr. Varun Patel, learned standing counsel for the appellant, assailed the impugned order by reiterating the findings recorded by the Assessing Officer. 4. As can be seen from the order passed by the Commissioner (Appeals), he, after appreciating the material on record, has found that a major portion of the investments made by the assessee were not in cash but by issue .....

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ng funds were utilised by the assessee in making the investments in question and, therefore, the assessee had not really incurred any direct expenditure for earning the exempt income. The Commissioner (Appeals) was, however, of the view that there would be some indirect administrative expenses incurred by the assessee for managing such investments. He, therefore, thought it reasonable to restrict the disallowance under section 14A of the Act to 0.5% of the value of investments amounting to ͅ .....

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