TMI Blog2017 (6) TMI 1229X X X X Extracts X X X X X X X X Extracts X X X X ..... or A.Y. 2008-09 - Decided against the revenue. Disallowance u/s 14A on account of expenses relatable to exempt income u/s 115JB - Held that:- the disallowance made under the normal provision u/s.14A of the Act cannot be imported or cannot be equated to the disallowance made u/s. 115JB of the Act. It is because the provisions of MAT are self-contained code and begins with non-obstante clause. Therefore it has no relation with other provision of the Act - therefore, the AO shall work out the disallowances in terms of the clause (f) to Explanation-1 of Sec. 115JB of the Act independently after considering the expenses debited in the profit & loss account as mandated under the provisions of law - thus this ground of appeal of the Revenue is partly allowed. - ITA No.2009-2010/Kol /2014 - - - Dated:- 2-6-2017 - Shri N.V.Vasudevan, Judicial Member and Shri Waseem Ahmed, Accountant Member By Assessee Shri Gouten Hangshing, CIT-DR Md. Ghayas Uddin, JCIT-DR By Respondent Shri B.K. Chaturvedi, AR ORDER Waseem Ahmed, Accountant Member:- Both appeal by the Revenue are directed against the different orders of Commissioner of Income Tax (Appeals)-IV, Kolkata of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erable force in the argument advanced by the appellant that the investment was made out of own fund and not form the borrowed fund. Therefore, the question of disallowance of proportionate interest under rule 8D(2)(ii) does not arise. The Revenue, being aggrieved, is in appeal before us on the following ground:- i) On the facts and circumstances of the case and also in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 5975517/- as disallowance made u/s. 14A r.w.r 8D overlooking the fact that the same was made in accordance with the provisions of IT Act, 1961. 6. The Ld. DR submitted that it is the duty of the assessee to justify on the basis of documentary evidence whether own fund was utilized in making the investment in securities. Ld. DR in support of his claim has relied in the order of Hon'ble jurisdictional High Court in the case of Dhunka and Sons reported in 12 taxman 227. The ld. DR relied in the order of AO. On the other hand, the Ld. AR for the assessee submitted that there was sufficient own fund available with the assessee for making the investment in the securities. Therefore, there is no question of making disallowance on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Act u/s 36(1) (i i i). G.D. Metsteel Pvt . Ltd. vs. - ACIT reported in 142 TTJ 641 (Mumbai Tr ibunal) Held that the investments are made by the assessee s own funds and have been made in the earl ier years, no disallowance u/s 14A is requi red to be made. The Head Note reads as under: - Business expendi ture-Disal lowance under sect ion 14A-Apport ionment of expenditure- When investments are made from own funds, merely because the assessee had to subsequent ly borrow the funds for business use, it cannot be said that the borrowed funds have been used for the purposes of investments . CIT vs. - HDFC Bank Ltd reported in 366 ITR 505 (Bom. ) Held, dismissing the appeal, (i ) that the f inding of fact given by the Tribunal was that the assessee s own funds and other non- interest bearing funds were more than the investment in the tax-f ree secur it ies. This factual posit ion was not one that was disputed. Undisputedly, the assessee s capital , prof it reserves, surplus and cur rent account deposits were higher than the investment in the tax f ree secur it ies. In view of this factual posit ion, it would have to be presumed that the investment made by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn case in ITA No.2248/K/2010 for AY 2006-07 following the judgment of Hon'ble Calcutta High Court in the case of AFT Industries Ltd. Vs. CIT (2004) 270 ITR 167 but he placed reliance on assessment order. We find that the issue is as regards to disallowance of cess on green tea leaf. We find that the identical issue is covered by the judgment Hon'ble Calcutta High Court in the case of AFT Industries Ltd. (supra) and also we have a coordinate bench decision in assessee s own case for AY 2006-07, wherein similar disallowance was deleted. Hence, we dismiss this issue of revenue s appeal as a covered matter. Taking a consistent view of co-ordinate Bench in assessee s own case, we uphold the order of Ld. CIT(A) and this ground of Revenue s appeal is dismissed. 10. Next issue raised by Revenue in this appeal is that Ld. CIT(A) erred in deleting the addition made by the AO for ₹37.50 lakh on account of interest on sticky loan. 11. At the outset, we find that similar issue is decided by this co-ordinate Bench of this Tribunal in assessee s own case in ITA No.684/Kol/2012 for A.Y. 2008-09 dated 08.02.2013 wherein the necessary observation in respect of the issue invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No. 684/Kol/2012. 8.2 Respectfully following the above, the addition made by AO in this regard is deleted. The Revenue, being aggrieved, is in appeal before us on the following ground:- iv) That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of ₹ 5975517/- made in computation of income u/s. 115JB overlooking the fact that the same was made in accordance with the provisions of IT Act, 1961. 15. Before us both parties relied on the order of Authorities Below as favourable to them. 16. We have heard rival contentions of the parties and perused the materials available on record. Issue in the instant case is with regard to the disallowance made by AO under the provision of clause (f) to Explanation-1 of Sec. 115JB of the Act. The AO while determining the profit under the normal provision of the Act has disallowed the interest expenses under Sec. 14A r.w.r. 8D(2)(ii) of Income Tax Rules 1962. The AO in his assessment order at the same time, while determining the profit under the provision of MAT also added the same amount of disallowance made u/s. 14A r.w.s 8D(2)(ii) of IT Rules. In this regard, we find that variou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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