TMI Blog2018 (11) TMI 1167X X X X Extracts X X X X X X X X Extracts X X X X ..... tatements filed by the assessee, we find that there is no dividend income received by the assessee. Therefore, we uphold the order of CIT(A) and dismiss the grounds raised by the revenue. - ITA No. 1738/Hyd/2017 and CO No. 4/Hyd/2018 - - - Dated:- 15-11-2018 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Assessee : Shri V. Raghavendra Rao For the Revenue : Shri Nil anjan Dey ORDER PER S. RIFAUR RAHMAN, A.M.: This appeal filed by the Revenue is directed against the order of CIT(A) 4, Hyderabad, dated 31/08/2017 for AY 2013-14. The assessee also filed CO. 2. Brief facts of the case are, the assessee company engaged in the business of manufacturing/process of marin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome against taxable income and at the same time avail of the tax incentive by the way of exempt income without making any apportionment of expenses incurred in relation to exempt income. 4. Any other ground that may be urged at the time of hearing. 5. Brief facts relating to the issue are, the AO observed that during the year under consideration, the assessee company has shown an amount of ₹ 21,24,78,808/- towards investment in unquoted equity shares of associates others and mutual funds as against ₹ 15,42,78,808/- of last year. The dividend income earned from these investments is exempt. Further, it is seen that the assessee company debited an amount of ₹ 2,04,32,375/- towards finance costs. During the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Interest expenditure 2,04,32,375/- (B) Average value of investments 18,33,78,808 (C) Average total assets 75,31,21,993 Expenditure not directly related to exempt income (A*B/C) 49,75,110 III % of average value of investment 9,16,894 Total expenditure to be disallowed u/s 14A of the income Tax act, 1961 (I+II+III) 58,92,004 5.2 As mentioned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er nearly 51,04,42,375/- is far more than the investments made and therefore no funds are borrowed or interest incurred on account of making investments. (b). CIT(A) ought to have given a finding that there is no nexus between the borrowals from banks which were for specific purpose and the investments in equity capital and that therefore provisions of Sec 14A do not come into play. (c). The learned CIT(A) and the AO failed to notice that each of the items in financial costs relates directly for loans for business purposes. None of the loans / packing credit has been used for purposes of investment towards share capital. 8. On perusal of record, we find that there was a delay of 92 days in filing this C.O. by the assessee, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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