TMI Blog2015 (5) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure to the extent of ₹ 6,17,197/- being loans/advances given from interest bearing funds to certain persons for non-business purposes. Before, the Commissioner of Income Tax (Appeals), the assessee gave detailed calculation with respect to total interest paid, utilization of interest bearing funds and the rate of interest. The Commissioner of Income Tax (Appeals) partly accepted the contentions of the assessee and reduced the disallowance of interest to ₹ 1,23,389/-. The Commissioner of Income Tax (Appeals) also accepted the rate of interest admitted by the assessee @ 7.58%. The grievance of the assessee is that the Commissioner of Income Tax (Appeals) has not properly appreciated the detailed interest calculations. We obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30-10-2007, declaring net loss of Rs.(-)20,79,601/-. The returns of the assessee for both the assessment years were selected for scrutiny. In this assessment year 2006-07 the Assessing Officer inter alia made addition of ₹ 98,124/- u/s. 14A r.w. Rule 8D. The Assessing Officer held that the assessee has earned dividend income. No separate accounts for trading portfolio and investment portfolio are maintained. The assessee has not furnished details of expenditure incurred for earning exempt income. In the absence of separate accounts, apportionment of dividend income between shares held as investment and shares held as stock-in-trade is not possible. Therefore, addition u/s. 14A r.w. Rule 8D on entire dividend income received by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance of interest on funds allegedly diverted for non-business purpose. Aggrieved by the assessment order dated 24-12-2009, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) sustained the addition of ₹ 3,27,585/- u/s. 14A r.w. Rule 8D. However, with regard to disallowance of interest, the Commissioner of Income Tax (Appeals) granted part relief by confirming addition to the extent of ₹ 1,23,389/- only. 5. Against the orders of First Appellate Authority for the respective assessment years, the assessee has come in second appeal before the Tribunal. 6. Shri Sunil Ganoo appearing on behalf of the assessee submitted, that the assessee is engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR submitted, that from the perusal of records it is not clear that the dividend income received by the assessee is from the shares held under investment portfolio or for trading purposes. So far as disallowance of interest is concerned, the Commissioner of Income Tax (Appeals) after considering the submissions of the assessee and calculation of interest given in statement of facts granted partial relief to the assessee. The Ld. DR prayed for dismissing both the appeals of the assessee. 8. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below. We have also considered the decisions on which the Ld. AR has placed reliance. The common issue in both the appeals is ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness, there is no question of making disallowance u/s. 14A of the Act. Similar view has been taken by the Co-ordinate Bench of the Tribunal in the case of Vishweshwar Sahakari Bank Ltd. (supra). Accordingly, this ground of appeal of the assessee in both the assessment years is allowed. 10. In assessment year 2007-08 the assessee has also raised issue with respect to disallowance of interest. The assessee has paid total interest of ₹ 15,85,460/- on borrowed funds. The Assessing Officer disallowed interest expenditure to the extent of ₹ 6,17,197/- being loans/advances given from interest bearing funds to certain persons for non-business purposes. Before, the Commissioner of Income Tax (Appeals), the assessee gave detailed calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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