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TMI Blog2017 (12) TMI 1560X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue urges the following two questions of law for our consideration:- "(a) Whether on the facts and in, the circumstances of the case and in law, the Tribunal was justified in deleting the additions made on account of disallowance of interest of Rs. 43,78,306/- on interest bearing advances to subsidiary companies?" "(b) Whether on the facts and in, the circumstances of the case and in law, the Tribunal was justified in upholding the decision of the CIT (A) on deleting disallowance of Rs. 42,71,943/- under section 14A of the I.T. Act, 1961?" 3. Regarding Question No.1:- (a) During the course of assessment proceedings the Assessing officer noticed that the Respondent Assessee had invested an amount of Rs. 51.47 Crores in its su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest in its success. It further records the fact that the Respondent - Assessee was having its own interest free funds to the tune of Rs. 169.14 Crores while the investment made in the subsidiary was to the tune of Rs. 51.47 Crores. Thus the Respondent - Assessee was in possession of surplus interest free funds sufficient to meet its investment in its subsidiary companies. Thus, relying upon the decision of the Apex Court in S.A. Builders Ltd. (supra), dismissed the Revenue's appeal. (d) Mr. Kotangale, the learned counsel for the Revenue urges that its complaint with the impugned order is that it does not record the nature of business interest, the Respondent has in its subsidiary companies. Therefore, the Appeal against the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 4. Question:- (a) It is an admitted position between the parties that issue raised herein stands concluded in favour of the Respondent by the decision of this Court in the case of Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT [2010] 328 ITR 81. (b) In the above case this Court has held that Rule 8(b) of the Income Tax Rules would apply with effect from Assessment Year 2008- 2009 and prior thereto the disallowance for expenditure under Section 14A of the Act has to be done on reasonable basis. In this case the CIT (A) has made a reasonable disallowance of 5% of exempt income. (c) In the above view, question (b) does not give rise to any substantial questions of law as the issue stands concluded by the decision against Revenue in Godrej & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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