TMI Blog2016 (7) TMI 1263X X X X Extracts X X X X X X X X Extracts X X X X ..... nnu (Accountant Member) The captioned appeal filed by the Revenue pertaining to assessment year 2007-08 is directed against an order passed by CIT(A)- 14, Mumbai dated 15/09/2014, which in turn arises out of an order passed by the Assessing Officer under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short the Act ) dated 13/01/2014. 2. In this appeal, the Revenue has raised the following Grounds of appeal:- 1. Whether on the facts and in the circumstances of the case and in law the Ld CIT(A) erred in deleting the interest expenditure disallowance of ₹ 47,50,382/-, towards earning exempt income 2. Whether on the facts and in the circumstances of the case and in law the Ld CIT(A) is justified in holding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance as computed under Section 14A was in term of the formula prescribed in Rule 80 of the Income Tax Rules, 1962? 3. At the time of hearing, the background of the case was explained as follows. That the impugned proceedings relate to a disallowance determined under section 14A of the Act in pursuance to the order of the Tribunal in ITA No.7116/Mum/2011 dated 7/9/2012, whereby the original disallowance made by the Assessing Officer was set aside. The Assessing Officer had made the disallowance under section 14A of the Act with respect to the element of interest expenditure based on the ratio of loans to total funds. This approach was based on the formula adopted in the preceding assessment year 2006-07. In assessment year 2006-07 al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeded on a mistaken footing in order to delete the impugned addition. 5. On the other hand, Ld. Representative for the assessee pointed out that assessee was not aware of the order passed by the Assessing Officer for assessment year 2006-07 and that assessee company would take separate steps for the same. Be that as it may, the plea of the assessee is that in any case, disallowance out of interest expenditure in terms of section 14A of the Act is not merited because all the investments are made in group companies and, further that the same were made out of internal accruals and non-interest bearing funds. The Ld. Representative for the assessee pointed out that the strategic investments are liable to be excluded for the purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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