TMI Blog2017 (9) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... Roshni Mishra (daughter-in-law), 250 gms. each in the hands of Aditi Mishra and Aanchal Mishra (minor grand-daughter) - Decided in favour of assessee. Disallowance of interest expense - Held that:- The assessee was having sufficient own funds as reflected in the capital account of the assessee as on 31.03.2008 so as to make investment for purchase of shares of other companies and generate exempt income. See CIT vs. Vijay Solvex Ltd.[2014 (12) TMI 1191 - RAJASTHAN HIGH COURT]- Decided in favour of assessee. - ITA No.475/JP/2014 - - - Dated:- 5-9-2017 - SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM For The Assessee : Shri Rajeev Sogani (CA) and Shri Rohan Sogani (CA) For The Revenue : Shri Varinder Mehta (CIT) ORDER PER SHRI KUL BHARAT, JM. This appeal by the assessee is filed against the order of ld. CIT (A), Central, Jaipur dated 09.04.2014 pertaining to assessment year 2008-09. The assessee has raised the following grounds of appeal :- 1. In law and in facts and in the circumstances of the appellant s case, the learned CIT (A), Central, Jaipur having considered the validity of the department circular no. 1916 whilst determining any unexplain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mend and/or withdraw any ground or grounds of appeal either before or at the time of hearing of the appeal. 2. Briefly stated the facts of the case are that the assessee Shri Udai Kant Mishra is a part of the Trimurty Group, on whom a search operation under section 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was conducted on 03.05.2007 whereby certain incriminating documents were found and seized. The assessee filed his e-return declaring total income of ₹ 1,05,32,110/-. The AO framed the assessment under section 153A/143(3) of the Act vide order dated 24.12.2009 by making additions on account of deemed dividend income, Unexplained jewellery and on account of Disallowance of Interest and assessed the total income of ₹ 1,26,32,909/-. Aggrieved, the assessee preferred an appeal before ld. CIT (A), who after considering the submissions, partly allowed the appeal of the assessee. Now the assessee is in further appeal before this Tribunal. 3. Ground nos. 1 to 4 are against non-granting of relief as per CBDT Circular in respect of the jewellery belonging to the married female. 3.1. The ld. Counsel for the assessee has reiterated the submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntal side or in-laws side Revenue could not place any material to show otherwise than that stipulated in CBDT Circular 1916, dated 11.5.1994 which states that if jewellery found in possession of a married lady, unmarried lady and male member of family is to extent of 500 gms., 250 gms and 100 gms. Each, officials would not question source and acquisition Further, Assessing Officer, in first instance, did not seize said jewellery Whether since jewellery was found to be within tolerable limit prescribed by CBDT, no addition was justifiable Held, yes (Paras 12 to 14)(In favour of assessee). In view of the above, additions made by the ld. AO and sustained by the ld. CIT (A), on account of excess jewellery found, during the course of search at the assessee premises, is not in consonance with the CBDT Circular and deserves to be deleted. 3.2. Per contra, the ld. D/R opposed the submissions. 3.3. We have heard rival contentions, perused the material available on record and gone through the orders of the authorities below. The ld. CIT (A) has not given any reason for denying the benefit/set off to the extent of 250 gms in case of Aditi Mishra and Aanchal Mishra ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a presumption would arise that investments would be out of the interest-free fund generated or available with the company, if the interest-free funds were sufficient to meet the investments .. 3.5. Ratio laid down, in the above mentioned judgment by the Bombay High Court has also been subsequently laid down by the Hon ble Gujarat High Court in the case of Hitachi Home and Life Solutions (I) Ltd. (2014) 221 Taxman 109 (Gujarat)(MAG.) and by Hon ble Karnataka High Court in the case of Microlabs Ltd. (2016) 383 ITR 490 (Karn.)(HC). 3.6. It is submit6ted that the assessee himself was engaged in the business of Real Estate wherein he acted as a broker for executing real estate deals. It is undisputed that investment made by the assessee was in to companies also engaged in Real Estate Business. As a result, these investments were nothing but strategic investments of the assessee in order to generate business in the future. It is now a settled proposition that Section 14A does not apply to investment of such nature. Reliance is placed on the following judicial pronouncements :- Cheminvest Ltd. vs. CIT (2015) 378 ITR 33 (Delhi HC) Selvel Advertising P. Ltd. (2015) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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