TMI Blog2019 (10) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ted:- 17-5-2019 - Shri Pradip Kumar Kedia, Accountant Member And Ms. Madhumita Roy, Judicial Member For the Appellant : Shri M. K. Patel, A.R. For the Respondent : Shri Vikram S. Sharma, D.R. ORDER PER MS. MADHUMITA ROY - JM: The instant appeal filed by the assessee is against the order dated 16.02.2017 passed by the Commissioner of Income Tax (Appeals)-2, Vadodara under section 143(3) of the Income Tax Act, 1961 (in short the Act ) arising out of the order dated 31.12.2015 passed by the Dy. Commissioner of Income Tax, Circle 1(2), Baroda for the Assessment Year 2013-14. 2. The assessee, having business of real estate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely disallowance to the tune of ₹ 17,48,368/- was made and added to the total income of the assessee. In appeal, the Learned CIT(A) restricted the disallowance to the exempt income claimed by the assessee to the tune of ₹ 95,000/- only. Hence, the instant appeal filed before us. 3. At the time of hearing of the instant appeal, the Learned Advocate appearing for the assessee submitted that the case was covered by the judgment passed by the Jurisdictional High Court in the case of CIT-vs-Corrtech Energy Pvt. Ltd. reported in 372 ITR 92 (Gujarat) where it has been held that where there is no exempt income, no disallowance is permissible. On the other hand, Learned DR relied upon the order passed by the Learned AO. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Chemicals Ltd. [2015] 376 ITR 553 (Guj.) wherein it was held that where the assessee has sufficient interest free funds out of which concerned investment had been made disallowance u/s 14A was not justified. The judgment passed by the Hon ble Bombay High Court in the case of CIT-vs-Reliance Utilities Power Ltd. [2009] 179 Taxman 135 where it was held that if there are funds available, both, interest-free and overdraft and/or loans taken, then a presumption would arise that investments would be out of interest free funds generated or available with company, provided said funds are sufficient to meet investments. Further that, the contention of the assessee that when the Assessing Officer is not satisfied with the claim made by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground raised by the appellant pertains to disallowance of ₹ 17,48,368/- - u/s 14A r.w. Rule 8D. It is noticed that the appellant has invested a sum of ₹ 7.75 crores in Agricultural land, Jakaranda Flats and Partnership firms. A sum of ₹ 95,000/- has been claimed as income exempt from tax. Accordingly, the AO invoked provisions of section 14A r.w. Rule 8D and disallowed ₹ 14,55,619/- out of interest and ₹ 2,92,749/- on account of administrative cost being 0.5% of average value of investment. The ld. ARs have vehemently argued that the appellant has its own interest free capital at ₹ 7.48 crores as on 31.03.2013 and hence no disallowance out of interest should be made. Since the ld. ARs have not furnished ..... X X X X Extracts X X X X X X X X Extracts X X X X
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