TMI Blog2016 (7) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... D is a debatable issue and hence cannot be made in the proceedings u/s 154 of the Act. But we find from the ld CITA’s order that this aspect has been dismissed and in fact had been held in favour of the revenue. Hence the revenue cannot have any grievance on the same. We also find that the assessee had not preferred any appeal before us against this finding of the ld CITA. Accordingly the ground no.2 raised by the revenue is dismissed as infructuous. - I.T.A No.2773/Kol/2013 - - - Dated:- 13-7-2016 - Shri M. Balaganesh, AM Shri S. S. Viswanethra Ravi, JM For the Appellant: Md. S. S. Alam, JCIT, Sr. DR For the Respondent: Shri B. K. Chaturvedi, AR ORDER Per Shri M. Balaganesh, AM: This appeal by revenue is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. However, disallowances were made on other issues. The ld AO during the course of giving effect proceedings to ld CITA order, issued a notice u/s 154 of the Act to make disallowance u/s 14A read with Rule 8D of the Rules and accordingly made disallowance of ₹ 92,89,825/- in addition to disallowance already made by the assessee in the sum of ₹ 45,28,096/-. The assessee preferred an appeal before the ld CITA on the disallowance made u/s 14A of the Act in the sum of ₹ 92,89,825/- among other additions. The ld CITA deleted the addition of ₹ 92,89,825/- u/s 14A of the Act on the ground that the assessee had made investments out of its own funds and not from the borrowed funds. Aggrieved, the revenue is in appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 8D(2)(ii) of the Rules. We find that the assessee company is having share capital of ₹ 10.67 crores and sufficient free reserves of ₹ 123.67 crores as on 31.3.2007 and ₹ 137.99 crores as on 31.3.2008 , but whereas the total investments as on 1.4.2007 was ₹ 105.86 crores and as on 31.3.2008 was ₹ 94.68 crores. We find that the ld CITA had given relief after going through the copy of the agreement of consortium of the banks and sanction letters of the banks submitted by the assessee that the loan was sanctioned for the purpose of working capital and purchase of fixed assets. We hold that the assessee has got sufficient own funds to make the investments and when that point is not in dispute, no disallowance c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this factual position, it would have to be presumd that the investment made by the assessee would be out of the interest-free funds available with the assessee. 6.1. Similar views were expressed in the following decisions :- Woolcombers of India Ltd vs CIT reported in 134 ITR 219 (Cal) East India Pharmaceutical Works Ltd vs CIT reported in (1997) 224 ITR 627 (SC) 6.2. We find that though the decision in the case of Reliance Utilities Power Ltd was rendered in the context of allowability of interest u/s 36(1)(iii) of the Act, the analogy drawn thereon would apply with equal force for adjudicating the issue of disallowance u/s 14A of the Act. We also find that the Hon ble Bombay High Court in the case of CIT vs HDFC Bank Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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