TMI Blog2021 (6) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... ted any additional evidence at all so as to invoke rule 46A of the Income Tax Rules. It also emerges that the Assessing Officer has disallowed/added the impugned interest @50% going by the assessee s depreciation claim to the said extent only than recording a clearcut finding on facts that the same had not been incurred wholly and exclusively for the purpose of business u/s.37 of the Act. We further find that the Revenue is itself fair enough in not disputing the assessee s entitlement to claim the impugned interest on merits to this effect as well. We thus affirm CIT(A) s findings qua the instant second issue therefore. Disallowing provision made on financial restructuring package - CIT-A deleted the addition admitting additional ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal for AY.2013-14 arises from the CIT(A)-3, Hyderabad s order dated 09-11-2016 passed in case No.0083/CIT(A)-3/16-17, involving proceedings u/s.143(3) of the Income Tax Act, 1961 [in short, the Act ]. Heard both the parties. Case file/records perused. 2. The Revenue has proposed the following substantive grounds in the instant appeal: 1. The Ld.CIT(A) erred both in law and facts of the case. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowances of ₹ 7,40,94,331/- made u/s.14(A) r.w.r.8D of the IT Rules disregarding the CBDT circular No.5 of 2014 dated 15.02.2014 which mandates the Assessing Officer to make such disallowance even if the investments do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 8D disallowance of ₹ 7,40,94,331/-, we find no substance in the instant ground since the CIT(A) has held that the assessee has not derived any exempt income in the relevant previous year. Case law:- i. CIT Vs. Chettinad Logistics Pvt. Ltd., [80 taxmann.com 221] (Madras); ii. CIT Vs. Corrtech Energy Pvt. Ltd., [223 Taxman 130] (Guj); iii. Cheminvest Ltd., Vs. CIT (2015) [378 ITR 33] (Del) holds that Section 14A read with Rule 8D applies only in relation to an assessee s exempt income and not otherwise. We therefore affirming the CIT(A) s findings deleting the impugned disallowance. The Revenue fails in its first substantive ground therefore. 4. We next come to Revenue s second substantive ground that the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actice every year. Whereas the Assessing Officer observed that the assessee debited an amount of ₹ 399,96,47,332/- towards interest on capital liability , the Assessing Officer further observed that following the same logic which the assessee adopted for the purpose of depreciation, only 50% of interest expenses are to be allowed and the balance of ₹ 199,98,23,666/- is to be disallowed. 7.3 It was explained by the appellant that interest of ₹ 399,96,47,332/- pertains to interest on all the loans taken including the loan taken in earlier years for meeting the cost of fixed assets and working capital. The appellant further submitted that total fixed assets added during the year were ₹ 388.64 Crores on which o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to revive the Assessing Officer s action disallowing provision made on financial restructuring package to the tune of ₹ 13,98,54,00,000/- which stands reversed in the CIT(A) s order, as under: 5.1. Learned departmental representative is fair enough not being able to pinpoint any violation of Rule 46A of the Income Tax Rules since the CIT(A) has not admitted any additional evidence filed at the assessee s behest. Coupled with this, it has come on record that the assessee has itself disallowed in its computation, a sum of ₹ 2240.42 Crores [(expenses qua power purchase cost, finance and employee costs (supra)]. This is what led the CIT(A) to delete the impugned disallowance/addition. We accordingly affirm the same si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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