TMI Blog2018 (11) TMI 1819X X X X Extracts X X X X X X X X Extracts X X X X ..... al. We, therefore, do not find any merit in the departmental appeal on this ground. Ground No.1 is accordingly dismissed. Addition under section 14A - Assessee submitted that there is no borrowed funds utilised by the assessee for purchase of investment in shares. Hence, disallowance of interest under sub-rule 2(ii) of Rule 8D is not applicable in assessee s case - HELD THAT:- The Hon ble Punjab and Haryana High Court in the case of Abhishek Industries Ltd.,[ 2015 (2) TMI 672 - PUNJAB AND HARYANA HIGH COURT] held that onus is upon A.O. to record satisfaction that interest bearing funds have been used for investment to earn tax free income . Since no borrowed funds have been used by assessee to make investment, therefore, Ld. CIT(A) c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a contract for work and labour and is not amenable to the provisions of the Section 194C of Income Tax Act, 1961. The A.O. however, held that since no tax was deducted, therefore, amount is disallowable under section 40 (a) (ia) of I.T. Act as provisions of Section 194C would apply in this case. 4.1. Ld. CIT(A) considering the various decisions cited by the assessee-company before him and considering the Explanation-III to Section 194C of the I.T. Act noted that the transactions relate to sale of material which cannot be termed as contract for work and labour. Hence, Section 194C is not applicable in assessee s case. Ld. CIT(A) also noted that since assessee had paid VAT on sale of goods to its customers, Section 194C of the Act is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for purchase of investment in shares. Hence, disallowance of interest under sub-rule 2(ii) of Rule 8D is not applicable in assessee s case. The Ld. CIT(A), accordingly, deleted the addition of ₹ 68,288/-. Part of this ground was allowed. 8. After considering the rival submissions, we do not find any merit in this ground of appeal of Revenue. Learned Counsel for the Assessee relied upon decision of Hon ble Punjab and Haryana High Court in the case of CIT vs. Metalman Auto (P) Ltd., (2011) 336 ITR 434 (P H) in which it was held that in the absence of any expenditure shown for earning dividend income, disallowance under section 14A was not justified . The assessee contended that no borrowed funds have been used for purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X
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