TMI Blog2019 (1) TMI 1569X X X X Extracts X X X X X X X X Extracts X X X X ..... no dividend income was earned by assessee, disallowance u/s. 14A is not warranted. Further the Balance Sheet of assessee reveals that the availability of interest free funds in the form of Share Capital and Reserves and Surplus is much more than the investment held by the assessee. Also see HDFC BANK LTD. VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX-2 (3) , MUMBAI OTHERS [ 2016 (3) TMI 755 - BOMBAY HIGH COURT] - in the present case no disallowance u/s. 14A us caked for. Thus, the grounds of appeal of assessee is allowed - ITA No. 81/RPR/2016 - - - Dated:- 18-1-2019 - SHRI ANIL CHATURVEDI, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM For the Appellant : Shri A. Maloo For the Respondent : Shri Sanjay Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee had invested ₹ 4.41 crores in the shares of three companies. The assessee was asked to explain as to why provisions of section 14A should not be invoked since, the income from shares is exempt from tax. Apart from making other submissions also submitted that assessee has not any exempt income and therefore provisions of section 14A are not applicable. The submissions of assessee were not found acceptable to Assessing Officer. Assessing Officer thereafter worked out the disallowance on account of interest expenditure at ₹ 40,17,237/- and disallowed the same u/s. 14A r.w. Rule 8D of the Act. Aggrieved by the order of Assessing Officer, the assessee carried the matter before the CIT(A) who upheld the order of Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferentiate between an investment for business expediency and investment otherwise. Whatever be the reason for making investment, in case of earning 0 r dividend, the same is tax exempt. Therefore, the disallowance is sustained and the ground taken by the appellant is rejected. Aggrieved by the order of Ld. CIT(A), assessee is now in appeal before us. 4. Before us, Ld. A.R. reiterated the submissions made before the Assessing Officer and CIT(A) and further submitted that since assessee has not earned any exempt income no disallowance u/s. 14A is called for. With respect to disallowance of interest he pointed to the Balance Sheet of company which is placed in the paper book at page 17 and submitted that the assessee has su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that Hon ble Bombay High Court in the case of HDFC Vs. DCIT reported in (2016) 383 ITR 529 (Bom) has observed as under : 15. It is clear that for the first time in the case of HDFC Bank Ltd. (Supra) that this Court took a view that the presumption which has been laid down in Reliance Utilities and Power Ltd. (Supra) with regard to investment in tax free securities coming out of assessee s own funds in case the same are in excess of the investments made in the securities (notwithstanding the fact that the assessee concerned may also have taken some funds on interest) applies, when applying Section 14A of the Act. Thus, the decision of this Court in HDFC Bank Ltd.(Supra) for the first time on 23rd July, 2014 has settled the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal. It is submitted that, the petitioner was not able to establish before the Assessing Officer and the CIT(A) that the amounts invested in the interest free securities came out of interest free funds available with the petitioner. In that view of the matter, it is submitted by him that the order of this Court in HDFC Bank Ltd.(Supra) would not apply to the facts of the present case. We are unable to understand the above submission. The Assessing Officer passed the Assessment order on 22nd December, 2010 under section 143(3) of the Act. The CIT(A) passed an order on 21st November, 2011 dismissing the petitioner s appeal. On both the dates, when the orders were passed by the Assessing Officer and CIT(A), the authorities did not have the b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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