9911796707
TMI Blog2019 (1) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... NY/2016 for the assessment year 2012-13. 2.The appeal has been filed by the appellant by raising the following substantial questions of law:- "1.Whether under facts and circumstances of the case, the Tribunal was right in upholding the disallowance of interests on debentures under Section 14A of the Act, particularly when the interest expenditure was incurred on debentures issued in the financial year 2008-09 for the specific purpose of acquiring a company in the past and not for investing in mutual funds? 2.Is the finding of the tribunal that the interest incurred by the assessee is not specifically towards acquisition of shares in M/s.Glamouroom Taps Pvt Ltd. not perverse?" 3.The assessee is engaged in the business of manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the assessee and dismissed the appeal by an order dated 15.03.2017 which is impugned before us. 4.We have heard Mr.N.V.Balaji, learned counsel for the appellant and M/s.R.Hemalatha, learned Senior Standing Counsel for the respondent/revenue. 5.Before the DRP, while filing objections the following contentions were raised by the assessee against the draft assessment order relating to addition proposed by the Assessing Officer. The objections are contained in paragraph 3.10 and the objections are under two heads, namely, (A) Non-applicability of Section 14A of the Act; and (B) No nexus between the borrowed capital and investment made by the Company. 6.M/s.R.Hemalatha, learned Senior Standing Counsel placed reliance on the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is not directly attributable to any particular income or receipt, an amount computed in accordance with the following formula, namely:- Where A - amount of expenditure by way of interest other than the amount of interest included in clause (i) incurred during the previous year; B - the average of value of investment, income from which does not or shall not form part of the total income, as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year; C - the average of total assets as appearing in the balance sheet of the assessee, on the first day and the last day of the previous year; (iii) an amount equal to one-half per cent of the average of the value of investment, income from which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.35 Interest on others 0.13 Total 3.48 With regard to the above, the assessee wishes to submit the following: (i) Interest Paid on CCDs During the FY 2008-09, Roca India issued CCDs to Keramik Holdings AG, Switzerland amounting to Rs. 35.24 Crores. The issue proceeds had been utilized for the purchase of shares in M/s.Glamourrom Taps Private Limited (which was amalgamated with the company w.e.f. 01.04.2008). As per the terms of the CCD Agreement entered into in July 2008, Roca India paid interest at the rate of 9.5% per annum which amounts to Rs. 3.35 Crores. Reference is drawn to Cash Flow Statement of the assessee for the year FY 2008-09, wherein it was clearly stated in the financing activities the assessee has received proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 14A of the Act cannot be made. 10.The DRP took note of the objections filed and the discussion starts from paragraph 4 of its order dated 31.08.2016. In this appeal we are not concerned about the discussion which has been made from paragraph 4.1 to 4.4 as the assessee is not on appeal against those findings, but what would be relevant will be from paragraph 4.7 to 4.10. The DRP has stated that the Assessing Officer has recorded his satisfaction and the matter has become final, thereafter they have quoted Section 14A of the Act, referred to the decision in the case of Maxopp Investment Ltd. vs. Commissioner of Income Tax, New Delhi reported in (2018) 402 ITR 640 (SC), quoted Rule 8D of the Rules and we find that the order pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, the Tribunal has not adverted to these contentions and in fact it appears to have committed factual error by stating that the income has gone up by Rs. 4.17 Crores. 12.We have perused the financials for the year ended 31.03.2012, more particularly, the note to financial statement for the year ended 31.03.2012 and in column 14, it deals with the current investments and we find that the investment is Rs. 45.27 Crores as against the investment of Rs. 38.24 Crores for the year ending 31.03.2011. This when compared to cash flow statement for the year ended 31.03.2007 would show that the investment has gone up by about Rs. 6.99 Crores. Therefore, we find that there is a factual error crept in in this regard. This in our considered view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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