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TMI Blog2021 (12) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER M. BALAGANESH (A.M): This appeal in ITA No.3180/Mum/2019 for A.Y.2014-15 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-13, Mumbai in appeal No.CIT(A)-13/DCIT-7(3)(1)/79/2015-16 dated 28/02/2019 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) by the ld. Dy. Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act which was duly processed u/s.143(1) of the Act. We find that the ld. AO in the assessment proceedings observed that assessee had made investment in shares to the tune of Rs. 10,35,28,236/- which would fetch exempt income for the assessee. Accordingly, he proceeded to examine the applicability of provisions of Section 14A of the Act r.w.r.8D(2) of the Rules. The assessee pointed out that it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee that since no exempt income has been earned by the assessee during the year under consideration, no disallowance u/s.14A of the Act would come into operation. Accordingly, the disallowance of administrative expenditure made under Rule 8D(2)(iii) of the Rules was deleted. However, the ld. CIT(A) applied the provisions of Section 36(1)(iii) of the Act and held that since investments were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to him, the provisions of 14A of the Act would be applicable even for strategic investment. Hence, the short dispute that ultimately went before the ld. CIT(A) was whether the disallowance u/s.14A of the Act could be made in respect of strategic investments made by the assessee. The ld. CIT(A) is bound to adjudicate only that issue which is before him and not consider a new source of income which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany which is made in the ordinary course of business and hence, once the borrowed funds are utilized for the purpose of business, the interest paid thereon would be squarely allowable as deduction u/s.36(1)(iii) of the Act. The law is very well settled on this issue by series of judicial pronouncements including various decisions of the Hon'ble Supreme Court. 4.1. In view of the aforesaid obser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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