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TMI Blog2016 (3) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... loans, placement of bonds and other financial instruments, filed its return of income for Asst. Year 2009-10 on 1.10.2009 declaring total income of Rs. 23,42,26,590/-. The case was taken up for scrutiny and the assessment was completed u/s 143(3) of the Income Tax Act, 1961 (in short „the Act‟) dt. 28.11.2011, wherein the income of the assessee was determined at Rs. 24,93,37,416/- in view of disallowance of Rs. 1,51,10,827/- made by the Assessing Officer („AO‟) u/s 14A r.w.r 8D of the I.T Rules, 1962 (in short „the Rules‟). On appeal, the ld. CIT(A)-4, Mumbai allowed the assessee partial relief vide the impugned order dt. 5.10.2012. 3. Both Revenue and the Assessed, being aggrieved by the order of the CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld have been excluded from „total interest‟ while applying Rule 8D. c. that bank charges of Rs. 8,22,500/- were different from interest and were incurred for earning taxable income and it should have been excluded from „total interest‟ while applying Rule 8D. d. that the investment in subsidiary and associate companies were strategic investments and have neither being made with the intention of earning exempt income nor have resulted in earning any exempt income and these investments should have been excluded from the total investments while applying Rule 8D." 5. Ground no. 1 is general in nature and therefore no specific adjudication is called for thereon. 6. Ground no. 2 - Disallowance u/s 14A r.w. Rule 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case. In respect of the assessee‟s claim that while computing the opening and closing balance of investments under Rule 8D(2)(iii) of the Rules, the AO has wrongly included the investments made by the assessee in foreign companies, debentures, income from which is exigible to tax and application money for share allotment amounting to Rs. 6,74,30,675/-, the ld. CIT(A) held that the assessee‟s claims were correct as only those investments, the income of which is exempt are to be considered for computing the said disallowance under Rule 8D(2)(iii) of the Rules and directed the AO to re-compute the same accordingly. 6.3 Before us the ld. AR for the assessee submitted that the assessee had share capital of Rs. 6,82,80,960/- a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... securities, then it would be presumed that the investments made by the assessee would be out of interest free funds available with the assessee. This decision of the Hon‟ble Bombay High Court (supra) has been followed by a co-ordinate bench of this Tribunal in the case of Centrum Direct Ltd. in ITA No. 5595/Mum/2011 dt. 15.10.2015. Respectfully following the decision of the Hon‟ble Bombay High Court in the case of HDFC Bank Ltd. (supra) and of the co-ordinate bench in the case of Centrum Direct Ltd. in ITA No. 5595/Mum/2011 dt. 15.10.2015, we concur with the contention of the assessee that no disallowance of interest can be made u/s 14A r.w. Rule 8D of the Act. 6.5.2 We, however, uphold the impugned order of the ld. CIT(A) that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e‟s appeal are general in nature and therefore no adjudication is called for thereon. 11. Ground no. 2 - Disallowance u/s 14A r.w. Rule 8D 11.1 In this ground, revenue assails the impugned order of the ld. CIT(A) in directing the AO to exclude investments made in shares of foreign company and investments towards share application money from the calculation of the disallowance u/s 14A r.w.r. 8D overlooking that these investments relate to income not chargeable to tax. The ld. DR was heard in the matter and placed strong reliance on the order of the AO in the matter which he pleaded be restored. 11.2 The ld. AR for the assessee was heard in the matter and supported the finding rendered by the ld. CIT(A) in the impugned order. The ld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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