TMI Blog2021 (6) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) TMI 219 - KARNATAKA HIGH COURT] no disallowance out of interest expenditure is called for - we confirm the deletion of disallowance of interest expenses of 8D(2)(ii) of IT Rules. Disallowance out of expenditure under rule 8D(2)(iii) - We notice that CIT(A) has deleted the disallowance by accepting the submissions of the assessee that the assessee has cross charged a sum of ₹ 1.19 crores out of operating and other expenses to the respective partnership firms. We are unable to agree with the view of Ld CIT(A) on this aspect. The cross charging of expenses is normally made in respect of services/facilities availed by one concern from another concern, Accordingly, the amount of ₹ 1.19 crores cross charged by the assessee to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) ACIT Central Circle-2(2) Bangalore Versus M/s. Century Real Estate Holdings Pvt. Ltd. And Vice-Versa 28-06-2021 Shri George George K., Judicial Member And Shri B.R. Baskaran, Accountant Member For the Appellant : Ms. Neera Malhotra, D.R. For the Respondent : Shri Ramakrishnan, A.R. ORDER PER B.R. BASKARAN, ACCOUNTANT MEMBER: This appeal filed by the revenue and the cross objection filed by the assessee are directed against the order dated 27.4.2017 passed by Ld. CIT(A)-11, Bengaluru and they relate to the assessment year 2009-10. The issues urged in these appeals relate to disallowance made u/s 14A of the Income-tax Act,1961 ['the Act' for short]. 2. The facts relating to the issue are state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, directed the A.O. to delete the disallowance of ₹ 1,51,37,386/-. Aggrieved, the revenue has filed this appeal. The assessee has also filed cross objection belatedly raising certain legal contentions. 4. We heard the parties and perused the record. The Ld. D.R. placed her reliance on the decision rendered by Hon ble High Court of Karnataka in the case of CIT Vs. Kingfisher Finvest India Ltd. (2020) 121 Taxmann.com 233. We have gone through the said decision and the same relate to a case where no dividend income was received. In this case, the assessee has earned dividend inome and hence, in our view the said decision is not applicable to the facts of the present case. 5. We notice that the own funds available with the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x free securities, no disallowance of interest expenditure u/s. 14A can be made. 42. In the light of above said decisions, we are of the view that disallowance of interest expenses in the present case of ₹ 49,42,473 made under Rule 8D(2)(ii) of the I.T. Rules should be deleted. We order accordingly. Thereafter, it was held by Hon ble Karnataka High Court as under:- The aforesaid shows that the Tribunal has followed a decision of the Bombay High Court in the case of CIT v. HDFC Bank Ltd. [2014] 366 ITR 505/226 Taxman 132 (Mag.)/49 taxmann.com 335. When the issue is already covered by a decision of the High Court of Bombay with which we concur, we do not find any substantial question of law would arise for considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. We notice that the assessee has earned exempt income as detailed below: Share profit from partnership firms - ₹ 2,46,49,618/- Dividend from mutual funds - ₹ 17,91,146/- ₹ 2,64,40,765/- The dividend received from mutual funds also does not require much expenditure for the assessee. In respect of partnership firms, we have earlier noticed that the services rendered in respect of partnership firms have been cross charged by the assessee. Hence over all supervision may be relevant for the purposes of sec.14A of the Act. Under these set of facts, we are of the view that the provisions of ru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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