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TMI Blog2019 (3) TMI 1836X X X X Extracts X X X X X X X X Extracts X X X X ..... immovable property. 2. The brief fact of the case is that assessee has filed return of income for the year under consideration on 13th Sep, 2013 declaring total income at Rs. 72,17,841/- and book profit at Rs. 2,61,51,722/-. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act. During the course of assessment, the assessing officer noticed that assessee has invested amounting to Rs. 6,61,73,138/- which may yield tax free income. The assessing officer has asked the assessee to explain disallowance of interest expenses as per the provisions of section 14A of the act r.w.s. 8D of the IT Rules, 1962. The assessee explained that it has mainly made investment in partnership firm, therefore, section 14A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer has made disallowance of Rs. 68,06,226/- out of total interest expenses and added to the total income of the assessee. 4. Aggrieved assessee has filed appeal the ld. CIT(A). The ld. CIT(A) has allowed both the grounds of appeal of the assessee. 5. During the course of appellate proceedings before us, the ld. departmental representative has supported the order of assessing officer. The ld. counsel has brought to our notice that identical issue on similar facts have been decided by the Co-ordinate Hench of the ITAT in the case of the assessee for assessment year 2012-13 and for assessment year 2011-12. We have gone through the order of the ITAT vide ITA no. 3115/Ahd/2015 in the case of Add. CIT vs. M/s. Priyal International Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t interest free funds were available, as was observed by the AO himself. The appellant also relied on the following judgment by the Hon'ble Gujarat High Court namely (a) CIT vs GSFC Ltd. 358 ITR 0323(Guj) (b) CIT vs Gujarat Narmada Valley Fertilizers Col. Ltd. 221 Taxman 479 (c) CIT vs Raghuvir Synthetics 354 ITR 222. (d) CIT vs Reliance Utilities & Power Ltd. 313 ITR 340 9.1 The fundamental principle highlighted in these judgments, as pointed out by appellant, is that if there are funds available, both interest free and overdraft or loans, then the presumption would arise that the investments would be out of interest free funds available with the appellant, if the interest free funds were sufficient to make such investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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