TMI Blog2014 (9) TMI 1099X X X X Extracts X X X X X X X X Extracts X X X X ..... ar in excess of the investment, we do not find any reason for making the disallowance at ₹ 50 lacs. We, accordingly, set aside the findings of the ld. CIT(A) and direct the A.O. to delete the additions sustained by the ld. CIT(A). - Decided against revenue Restricting the disallowance on account of administrative and managerial expenditure at 5% of the exempt income - Held that:- We have carefully perused the order of the Tribunal in assesse’s own case [2010 (10) TMI 214 - ITAT MUMBAI]wherein ITAT has confirmed the disallowance on account of administrative and managerial expenses u/s 14A of the Act to the extent of 5% of the total exempt income. Respectfully following the findings of the Tribunal, the ld. CIT(A) has restricted the disallowance. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A).- Decided against revenue Disallowance of interest expenditure - Held that:- Total own funds available with the assessee was at ₹ 98.15 crores. The assessee has purchased fixed assets of ₹ 37.02 crores which is out of loan funds taken during the year thereby leaving the assessee net own funds of ₹ 98.14 crores. The investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were at ₹ 9.39 crores. We also find that the assessee had profit on sale of investment at ₹ 21.55 crores, net profit during the year at ₹ 48.15 lacs and funds available on account of sale of investment during the year at ₹ 38.31 crores. In our considered opinion, the assessee was having sufficient own funds for making the investment of ₹ 9.39 crores. As own funds are found to be far in excess of the investment, we do not find any reason for making the disallowance at ₹ 50 lacs. We, accordingly, set aside the findings of the ld. CIT(A) and direct the A.O. to delete the additions sustained by the ld. CIT(A). Ground No. 4 to 5 of Revenue s appeal are accordingly dismissed and ground No. 1 2 of assessee s appeal are allowed. 6. Ground No. 6 relates to restricting the disallowance on account of administrative and managerial expenditure at 5% of the exempt income. 7. The ld. CIT(A) has considered this issue at para No. 2.3 (g) of his order wherein he has followed the decision of the Tribunal in assessee s own case for A.Y. 2005-06. We have carefully perused the order of the Tribunal in assesse s own case in ITA No. 1090/Mum/2009 order dtd. 8-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/- being amortization of premium paid for leasehold land. We find that identical issue was decided by the Tribunal in assessee s own case for A.Y. 2005-06 in ITA No. 1090/Mum/2009 at para 9 of its order. Respectfully following the findings of the Tribunal (supra), ground No. 6 of assessee s appeal is dismissed. 16. The grievance raised vide ground No. 7, as stated by the ld. Counsel for the assessee otiose, hence dismissed. 17. Ground No. 8 relates to the value to be adopted with regards to the opening written down value of the block of assets. 18. A similar issue was decided by the Tribunal in ITA No. 1090/Mum/2009 for A.Y. 2005-06 at para 10 of its order. Respectfully following the decision of the Tribunal, we uphold the impugned order of the ld. CIT(A) on this issue and dismiss ground No. 8 of assessee s appeal. 19. Ground No. 9 relates to the addition of provision for doubtful debts for computing the book profit u/s 115JB of the Act. 20. This issue has been considered by the ld. CIT(A) at para 7 and at para 7.1 of his impugned order and held that clause (i) in Explanation to section 115JB of the Act is with retrospective effect from 1-4-2001 by the Finance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -08 (Assessee s appeal) 28. Ground No. 1 2 relates to the disallowance of interest expenditure amounting to ₹ 1.06 crores. 29. The ld. CIT(A) has considered this issue at para 2.3 (g) of his order. The assessee has made fresh investment of ₹ 133.69 crores which include share investment of ₹ 30 crores received from M/s Godrej Beverages Pvt. Ltd. Accordingly, the net investment was at ₹ 103.69 crores. A perusal of the fund flow/cash flow statement show that the assessee had profit on sale of investments at ₹ 44.92 crores. Net profit during the year was at ₹ 6.20 crores and net sale proceeds from investments were at ₹ 34.43 crores and opening balance of cash and bank was at ₹ 12.59 crores. Thus total own funds available with the assessee was at ₹ 98.15 crores. The assessee has purchased fixed assets of ₹ 37.02 crores which is out of loan funds taken during the year thereby leaving the assessee net own funds of ₹ 98.14 crores. The investment made during the year is at ₹ 103.69 crores which means that ₹ 5.55 crores have been invested not out of own funds. Taking average rate of interest as taken by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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