TMI Blog2020 (12) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... ents it is held that when there are substantial interest free and own funds, presumption would be that the investment and/or advances were made out of such funds. We do not find any infirmity in the finding of the ld. CIT(A) on this issue. Accordingly following the orders of the Tribunal in the case of assessee for the earlier years, we uphold action of the ld. CIT(A) and dismiss this ground of appeal of the Revenue. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Hon'ble jurisdictional high Court in the case of Nirma Credit Capital P. Ltd.[ 2017 (9) TMI 485 - GUJARAT HIGH COURT] has held that for application of Rule 8D(2), disallowance of expenditure to be considered should be net of interest i.e. interest paid minus interest rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 1,19,90,822/- which was added by the AO by making disallowance under section 36(1)(iii) of the Act. It appears that this figure has wrongly been mentioned by the Revenue. A perusal of the order of the CIT(A), in para 4.2 reveals that the assessee has subsequently filed a rectification application before the AO under section 154 of the Act, and the order for rectification was passed on 17.2.2017. The AO worked out the disallowance after rectification at ₹ 51,84,596/-. Thus, the ld. CIT(A) treated the subject matter of appeal to the extent of amount of ₹ 51,84,596/- disallowed under section 36(1)(iii) of the Act. The Revenue has erred in mentioning the figure of ₹ 1,19,90,822/- in its grounds mentioned above. Taking no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der, after a rectification application the figure of disallowance was restricted to ₹ 51,84,596/-. Aggrieved by the disallowance made by the AO, the assessee went in appeal before the ld. first appellate authority, who by following various judgments of jurisdictional High Court, and also considering the fact that similar disallowance was deleted in assessee's own case for the Asstt. Year 2011-12, 2012-13 and 2013-14, deleted the disallowance of ₹ 51,84,596/- for the year under consideration. Aggrieved by the action of the CIT(A), Revenue is now before the Tribunal. 5. Before us, the ld. Sr. DR supported the order of the AO and reiterated that since the assessee has not established nexus between the amount advanced to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make investment/advances. In number of authoritative judgments it is held that when there are substantial interest free and own funds, presumption would be that the investment and/or advances were made out of such funds. We do not find any infirmity in the finding of the ld. CIT(A) on this issue. Accordingly following the orders of the Tribunal in the case of assessee for the earlier years, cited (supra), we uphold the action of the ld. CIT(A) and dismiss this ground of appeal of the Revenue. 7. Now we deal with second issue of the Revenue regarding disallowance of ₹ 2,88,48,738 under section 14A of the Act. 8. During the assessment proceedings, the ld. AO noticed that the assessee has investment amounting to ₹ 70,00,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowances under section 14A. After considering the submissions of the assessee, and ratio laid down Hon'ble Gujarat High Court in the case of CIT Vs. Suzlon Energy Ltd. as also the decision of ITAT in the assessee's own case for the Asstt. Year 2011-12 to 2013-14 on identical issues, allowed the claim of the assessee, and deleted the impugned disallowance. Now, the Revenue is challenging the action of the ld. CIT(A) in deleting disallowance made under section 14A. 9. Before us, both the parties supported orders of respective authorities. The ld. counsel for the assessee while reiterating the submissions made before the ld. CIT(A) also relied upon the decision of Hon'ble jurisdictional High Court in the case of Pr. CIT Vs. Nirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the assessee has earned higher interest income than the interest paid on the borrowed funds. We find that fact the present case is similar to the issue in the case of Nirma Credit Capital (supra), and therefore, in our view this case law supports the case of the assessee. Moreover, ITAT in the assessee's own case for earlier years also allowed similar claim of the assessee. The facts in the present year is also similar to the facts of earlier years, and therefore, following the consistency with the earlier orders, we allow the claim of the assessee, and dismiss the ground of appeal of the Revenue. 11. In the result, the appeal of the Revenue is dismissed. Order pronounced in the Court on 3rd December, 2020 at Ahmedabad. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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