TMI Blog2016 (10) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... as use of borrowed funds for the purpose of business of the company. However to the extent borrowed funds were used in making investments in unlisted/unquoted companies, the AO has treated the same as not for the purpose of business of the Assessee. Such a distinction was rightly held by the CIT(A) to be not proper. We therefore do not find any merit in Gr.No.3 raised by the Revenue. The same is accordingly dismissed. - ITA No. 316/Kol/2014 - - - Dated:- 19-10-2016 - Shri N. V. Vasudevan, J.M. Shri M. Balaganesh, A.M. For the Assessee : Sri Manoj Kataruka. Advocate For the Revenue : Sri Rajat Kumar Kureel, JCIT, Sr.DR ORDER Per Shri N. V. Vasudevan, J.M. This is an appeal by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income as claimed by the assesee for ₹ 83,13,550/- . The disallowances work out to ₹ 1,20,82,774/-. Rule 8D(2) (i) NIL Rule 8D((2)(ii) interest 1,29,16,413 X 17,17,80,126+ 10,46,99,437/- 2 _____________________________________ 18,81,64,850+12,53,23,297 = 1,29,16,413+13,83,39,781 18,81,64,850+ 12,53,23,297 = 15,67,44,073 = 1,13,91,576 Rule 8D (2) (iii) % of ₹ 13,82,39,781 6,91,198 Total 1,20,82,774/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Without prejudice to the appellant s contention that provisions of section 14A are not applicable to the appellant company. It is submitted the disallowance u/s.14A cannot in case exceed the amount of dividend income earned during the year. Reliance is placed in this regard on the decision of Hon ble ITAT, Chandigarh in case of ACIT vs. Punjab State Coop Marketing wherein the Hon ble Tribunal has held that disallowance u/s.14A cannot exceed the exempt income. Further, it is stated that in appellant s own case for A. Y.2009-10, the AO has vide his order u/s 143(3) dated 17.11.2011 restricted the disallowance u/s14A to the extent of dividend income earned. In support of this contention a copy of assessment order for A.Y.2009-10 is furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nos.1 and 2 raised by the Revenue. Accordingly the same are dismissed. 8. Ground no.3 raised by the Revenue read as under: 2. That is the facts and in law of the case the Ld. CIT(A) erred in allowing the interest on loan amounting to ₹ 862668/- which was not utilized for business purpose. 9. The AO disallowed interest expenses claimed by the assessee for the following reasons: DISALLOWANCE OF INTEREST The assessee has debited ₹ 1,29,16,413/- secured loan and unsecured loan for ₹ 14,61,16,864/- and ₹ 3,95,67,216. Examination of balance sheet also shows investment in unquoted share for ₹ 57,51,120/- as per Sch. 5 and also loan and advance as per Sch,5 for &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h on behalf of the appellant along with the supporting details/documents furnished and the judgments of the cases relied upon, perused the facts of the case including the findings of the AO in the impugned assessment order and other materials brought on record. The AO has made the disallowance of the interest paid towards the loan and advances on pro-rata basis on account of non use of the fund for the purpose of business of the appellant since no benefit derived the appellant during the year out of the said loan amount. However, in this regard, the AR of the appellant submitted that the main business of the appellant company is dealing in shares, leasing and finance in all kinds of goods and securities and making investments etc. During th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the above, it is prayed that the disallowance made by the Assessing officer may deleted. After considering the submission of the appellant and the findings of the AO and perusing the entire facts of the case and keeping in view the principle of the judgments of the cases relied upon. I am of the view that the AO was not justified in making the impugned disallowance of the interest paid towards loan and advances on pro-rata basis by holding that the funds were not used for the business purposes of 3 appellant. It is seen that one of the main business activities of the appellant has dealing in shares along with leasing and finance in all kinds of goods and securities and making investments. Therefore, I agree with the contention ..... X X X X Extracts X X X X X X X X Extracts X X X X
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