TMI Blog2021 (4) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... ar in excess of the investment made. Therefore, the presumption arises that such investments have been made from capital and reserves of the company and from non interest bearing funds and not out of borrowed funds to warrant any disallowance while computing the income. [See: Reliance Utilities and Power Ltd. [ 2009 (1) TMI 4 - BOMBAY HIGH COURT ] and Lalsons enterprises [ 2010 (4) TMI 98 - DELHI HIGH COURT ] . It is also pertinent to mention here that the Assessing Officer has not recorded the satisfaction that assessee had incurred expenditure to earn exempt income as envisaged under Rule 8D(1) of the Rules. There is no positive material to show that the assessee had incurred such expenditure to earn exempt income. Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the tribunal is justified in law in deleting the disallowances made under Section 14A r.w.r 8D(2)(ii) and 8D(2)(iii) of the Act, without appreciating the Board's Circular No.5/2014 dated 11.02.2014 , which emphasizes that the only expenditure allowable is which is relatable to earning of income and therefore, the expenses which are relatable to earning of exempt income have to be considered for disallowance, irrespective of the fact whether any such income has been earned during the financial year or not? 2. Facts leading to filing of these appeals briefly stated are that the assessee is a company registered under the provisions of the Companies Act, 1956. The assessee is a builder as well as a developer. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8D(2)(ii) and held that the assessee had made investment and claimed the entire dividend income to be exempt from tax. It is also argued that the tribunal erred in deleting the disallowance under Section 14A read with Rule 8D(2)(iii) of the Rules on the ground that once the assessee takes a stand that it had not incurred any expenditure under Section 14A, then the Assessing Officer is not justified in invoking the Rule 8D(2)(iii) for disallowances of indirect expenses unless the Assessing Officer records dissatisfaction of the claim. It is also submitted that interest free deposits cannot be treated to be non performing assets and they do not benefit the receiver of such deposit by way of notional income. It is also pointed out that Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliance has been placed on 'CIT VS. RELIANCE UTILITIES POWER LTD.', (2009) 313 ITR 340 (BOM.), 'CIT VS. MICROLABS LTD', (2016) 383 ITR 490 (KAR.), 'CIT VS. LALSONS ENTERPRISES', (2010) 324 ITR 426 (DEL), 'KODAGU DISTRICT CO-OP BANK LTD. VS. ACIT IN ITA NO.318 OF 2016 AND 'DCIT VS. M/S QUEST GLOBAL ENG. SERVICES PVT. LTD. IN ITA NO.33/2015. 6. We have considered the submissions made by learned counsel for the parties and have perused the record. The solitary issue involved in the appeals filed by the revenue is whether the tribunal was justified in law in deleting the disallowance made under Section 14A read with Rule 8D(2)(ii) amounting to ₹ 4,64,15,708/- and under 8D(2)(iii) being 0.5% of & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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