TMI Blog2020 (3) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... ing future revenue to the assessee. When it made in relation to advances. Though, it is another fact that the business of such nature did not materialized in positive outcome and the subsidiary had to close such business operation. The Hon ble Supreme Court in S.A. Builders [2006 (12) TMI 82 - SUPREME COURT ] held that whether expenditure may not have been incurred under any legal obligation, yet it is allowable as a business expenditure if it was incurred on grounds of commercial expediency. The case of the assessee is that the assessee has made advances to its subsidiary for business expediency. - Decided against revenue - ITA No. 6549/Mum/2017, ITA No. 6550/Mum/2017, ITA No. 6072/Mum/2017, ITA No. 6073/Mum/2017 - - - Dated:- 14-2-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to how the investments have been made from the own surplus funds because the assessee has also made investments in various assets out of its available funds? 3. Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A), was justified in directing the AO to delete the addition of ₹ 2,86,37,549 being income u/s 5 of the IT Act. 4. Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A), was justified in directing the AO to delete the addition of ₹ 2,86,37,549 on the basis of resolution passed by the borrower company about non-payment of interest on loans taken by it? 5. Whether, on the facts and circumstances of the case and in law, the Ld. CIT(A) was right in not taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sides the other additions/disallowances under section 14A of ₹ 8,71,03,426/-, which includes under disallowance Rule 8D(2)(ii) of ₹ 7,25,44,418/- and disallowance under Rule 8D(2)(iii) of ₹ 1,53,79,008/-. The assessing officer also made addition under section 5 of ₹ 2,86,37,549/-. On appeal before the ld. CIT(A), the disallowance under section 14A was restricted to ₹ 46,78,600/- and addition under section 5 on account of presumptive income was also deleted. Aggrieved by the order of ld. CIT(A), both the parties have filed their respective appeal by raising the grounds of appeal as mentioned above. ITA No. 6072/Mum/2017 by assessee for AY 2013-14 4. The ld. AR of the assessee submits that during the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,600/-. Before us, the ld. AR of the assessee vehemently submitted that during the relevant period, the assessee has not earned any exempt income. We have noted that on similar set of fact in assessee s own case, the co-ordinate bench passed the following order: 4. We have considered the rival submission of the parties and have gone through the orders of authorities below. We have seen that the assessee has no exempt income during the period relevant to the assessment year under consideration. The assessee has not made any investment during the year under consideration. There is no dispute that all investment has been made in the subsidiaries companies as strategic investment so as to get controlling interest in such subsidiaries. The H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the year under consideration. Therefore, in our opinion there was no justification for making disallowance as per the provisions of section 14A r.w.r 8D of the Rules. Considering all these factors we are of the opinion that the FAA was not justified in upholding the order of the AO. Hence, reversing his order we decide the effective ground of appeal in favour of the assessee. 5. Considering the facts of the case and the decision of Tribunal in assessee s own case, the disallowance made by AO and confirmed by ld. CIT(A) is uncalled for and therefore, we direct the AO to restrict the disallowance to ₹ 13.10 Lakhs, which was voluntary disallowed by assessee. Thus, the ground of appeal raised by assessee is allowed. 7. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of assessing officer may be restores by reversing the order of ld CIT(A). 13. On the other hand, the ld. AR of the assessee supported the order of ld. CIT(A) and would submits that these grounds of appeal are also covered by the decision of Tribunal in assessee s own case for earlier years. 14. We have considered the submission of both the parties and gone through the order of lower authorities. The Assessing Officer made addition on account of presumptive basis under section 5 on advances made by assessee to its subsidiaries. The Assessing Officer computed the disallowance/addition of ₹ 2.86 crore. We have noted that the assessee advanced the money to its subsidiary, which falls under the business expediency. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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