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TMI Blog2020 (10) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... ERABAD - AT X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court in the case of SA Builders Ltd., Vs. CIT(Appeals), Chandigarh [288 ITR 1] (SC). Therefore, he pleaded that the investments are towards commercial expediency of the assessee and therefore disallowance u/s.36(1)(iii) is not attracted. 3.2. As regards the proposed disallowance u/s.14A of the Act, the assessee submitted that there was no exempt income earned by the assessee during the relevant assessment year and therefore, no disallowance was to be made u/s.14A of the Act. However, the AO observed that the Hon'ble Special Bench of the ITAT Delhi Tribunal in the case of Cheminvest Limited Vs. ITO [121 ITD 318] (Del)(SB) has held that - disallowance u/s.14A can be made in the year in which no exempt income has been earned or receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al relief was granted by the CIT(A). 5. Against the said order of the CIT(A), the assessee is in second appeal before us. 6. The case is taken up for hearing through video conferencing and both the parties were heard. 7. Ld.Counsel for the assessee, while reiterating the submissions made by the assessee before the lower authorities, submitted that assessee's own funds being the share capital and reserves were much more than the investments made by the assessee in its subsidiaries. He relied upon the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Reliance Utilities & Power Ltd., (2009) [178 135/313 ITR 340] (Bombay HC), wherein it was held that - "if the funds are available, both interest free and/or loans taken, jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e investments have been proved in this case and therefore, the assessment order may be confirmed. 9. Having regard to the rival contentions and material on record, we find that the investments have been made from the cash credit account, into which, the Ld.Counsel for the assessee has claimed, that the sale proceeds of the assessee as well as the borrowed funds have been deposited and utilised. The AO has disallowed the interest on the entire investment though according to the assessee, the cash credit account contains both interest free as well as interest bearing funds. As held by the Hon'ble Supreme Court - where the interest free funds and interest bearing funds are mixed and the assessee makes investments in sister concern, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt appeals of the assessee for the assessment years under consideration are similar as in the AY.2010-11, and therefore, for the reasons given by us in the appeal of the assessee in ITA No.2132/Hyd/2017 (AY.2010-11), all the present appeals of assessee are also treated as allowed for statistical purposes. 13. As far as the appeals of the Revenue for the assessment years under consideration are concerned, it is submitted by the Ld.Counsel for the assessee that the tax effect in Revenue appeals for the AYs.2011-12 and 2013-14 is below the tax limit fixed by the CBDT vide Circular No.17 of 2019 dated 8th August, 2019. 13.1. Ld.DR also confirmed that the tax effect in these two appeals is less than Rs. 50 Lakhs and therefore for these reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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