TMI Blog2021 (8) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenditure and the business. Ordinarily it is for the assessee to decide whether a certain expenditure should be incurred during the course of his business and if such expenditure has been incurred for promoting the assessee's business and earning profits, the assessee can claim a deduction of the expense under section 37(1) of the Act. Respectfully following the ratio of decision of the Apex Court in the case of CIT vs. Delhi Safe Deposit Co. Ltd. [ 1982 (1) TMI 2 - SUPREME COURT] thus hold that the interest expense has been incurred by appellant in respect of earning taxable income. Appeal of the revenue is dismissed. - ITA No. 6432/Del/2017 - - - Dated:- 4-8-2021 - Suchitra Kamble, Member (J) And Dr. B.R.R. Kumar, Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Before the AO, it was submitted that this amount pertains to the interest cost utilized for granting ICDs to group companies and the interest earned thereof has been duly offered to tax as the business income. The AO did not accept the contention of the assessee and held that the company failed to prove that the interest bearing fund was granted as loan to the group companies. 5. The ld. CIT (A) deleted the addition made by the AO. 6. Aggrieved the revenue filed appeal before us. During the hearing, the ld. DR relied upon the order of the AO while the ld. AR supported the order of the ld. CIT(A). 7. We have gone through the facts of the case and also order of the ld. CIT (A). For the sake of ready reference, the operative pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce under section 14 A Amount disallowed under section 37 of the Act Amount not considered while computing the disallowance under section 14 A of the Act 1 . Interest paid on ICDs 80 , 13 , 168 2 . Interest on CCDs 16 , 51 , 45 , 127 7 , 60 , 92 , 407 3 . LC Charges 7 , 60 , 92 , 407 4 . Interest on NCDs 1 , 44 , 50 , 900 5 . NCD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its return of income expense of ₹ 6,92,18,710/- was not disallowed u/s. 14A of the Act. (ii) Purchase of 150 12.5% convertible debenture of Religare Finvest Limited ( RFL ) in the secondary market on December 7, 2012 aggregating to ₹ 16.17 crores). It was further submitted that as the appellant on sale of the said NCDs earned interest aggregating to ₹ 57,28,081/- and profit on sale of NCDs of ₹ 81,53,633/- which has been duly offered to tax as business income in its return of income filed for the subject AY the corresponding CCF interest cost of ₹ 68,73,697/- was not disallowed u/s. 14A of the Act. During the subject AY, the appellant has incurred interest costs aggregating to ₹ 34,51,18,811 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual fund houses on March 28, 2013 at a coupon rate of 14 percent. Ld. AR of appellant further submitted that being a prudent businessman, it would not raise funds from an international organisation like IFC which is funded by the World Bank nor would it place NCDs with reputed mutual fund houses unless and until its own funds were not adequate to meet its business requirements viz. infusion of additional share capital in its subsidiaries and grant of inter-corporate deposits to its subsidiaries for enabling them to meet their working capital requirements. Perusal of submissions reveals that there exists one to one correlation between the funds aggregating to ₹ 404.83 crores received on allotment of CCDs to IFC and part utilisation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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