TMI Blog2021 (7) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has invested in the earlier years - we observe that there was increase in the reserves and surplus during the impugned AY is ₹ 95,71,47,370/-. The details of investments are appearing in Note No. 8 where the increase in the investments in mutual funds only by ₹ 4,30,164/-. The assessee also tried to explain that investments were made on 31st March, 2007 in mutual funds of ₹ 1,95,58,373/-, which has been carried forward till the impugned AY, but, it is not clear that exact scrips were in existence during the impugned AY and the quantum of mutual fund investments has also been reduced from 2007 to 2013 which only ₹ 45,43,087/-. The total investments at the year end as per Schedule No. 8 is ₹ 2,75,95,387/-, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )-1, Hyderabad dated 26-04-2018 is erroneous, contrary to law and facts of the case. 2. Commissioner of Income Tax (Appeals) is not justified in sustaining the disallowance of ₹ 18,18,478/- made by the Assessing Officer u/s. 14A r.w.r. 8D of the Act stating that there should be a cost for any investment return . Commissioner of Income Tax (Appeals) ought to have seen that the Appellant did not incur either interest or any expenditure for earning exempt income since most of the investments were made in earlier years only. Hence Commissioner of Income Tax (Appeals) is not justified in upholding the disallowance of ₹ 18,18,478/- u/s. 14A as made by the Assessing Officer. 3. Commissioner of Income Tax (Appeals) is not jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued. The assessment was completed u/s. 143(3) on 17.03.2016 by determining total income at ₹ 19,58,95,894/- by making disallowance of expenditure of ₹ 18,18,478/- u/s. 14A and u/s. 234A of the Act. 3. When the assessee preferred an appeal before the CIT(A), the CIT(A) partly allowed the appeal of the assessee. 4. Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT. 5. The assessee has raised 4 grounds of appeal, out of which ground Nos. 1 4 are general in nature. 6. As regards ground No. 2 regarding disallowance u/s. 14A of the Act, during the assessment proceedings, the Assessing Officer noticed from the Balance Sheet that the assessee company has made investments to the tune of ₹ 24, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts submitted before the learned C.I.T.(A), it may also kindly be seen from the balance sheet that its capital and reserved were ₹ 71,03,96,368/- as at 31-03-2012 and ₹ 1,66,15,43,138 as at 31-03-2013. (please see page 1 of paper book) Profit after depreciation and taxes was ₹ 96.87 crores. (Please see page 2 of paper book). Investments as at 31-03-2012 were ₹ 2,71,65,223/- and increased to ₹ 2,75,95,387/- as at 31-03-2013. (please see page 1 of paper book) In this connection the appellant relies on the decision of the Hon'ble Bombay High Court in the case of Pr. CIT vs. Shapoorji Pallonji Co. Ltd., 117 Taxmann.com 625 BOM HC (annexed at pages 6 to 10) wherein it has been held that where interest-fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of the assessee is not acceptable that there was a sufficient reserves and surplus are available with the assessee. The assessee was unable to show whether sufficient reserves and surplus are available on the date of investment made. Merely showing statistical data at the year end is not sufficient and she should have proved before the authorities below that the assessee has surplus funds which have been invested. Further, on perusal of the financial statements, there was hardly investment of only ₹ 4,30,164/- made during the year. It clearly shows that the assessee has invested in the earlier years. Further, we observe that there was increase in the reserves and surplus during the impugned AY is ₹ 95,71,47,370/-. The det ..... X X X X Extracts X X X X X X X X Extracts X X X X
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