9911796707
TMI Blog2021 (12) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... The sole grievance of the revenue is deletion of disallowance u/s. 14A. The grounds read as under: "1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case. 2. The ld. CIT(A) has erred in restricting the disallowance made u/s. 14A r.w. Rule 8D to be confined to 3rd limb of Rule 8D alone and deleting the disallowance pertaining to 2nd limb of Rule 8D. 3. The ld. CIT(A) has erred in not considering the fact that assessee has debited interest expenses in the books of account and the assessee has been following mixed funds accounting i.e., using its own funds and borrowed funds. 4. The ld. CIT(A) has erred in not considering the decision of the Hon'ble Supreme Court in the case of M/s. Godrej a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stments made by the assessee and therefore, no interest disallowance would be justified. The Ld. DR, on the other hand, sought distinction in the orders of earlier years by submitting that there was no interest disallowance in those years. 5. Having heard rival submissions and after going through the orders of lower authorities including the judicial decisions rendered in assessee's own case, our adjudication would be as given in succeeding paragraphs. 6. The material facts are that the assessee being resident corporate assessee is registered as Non-Banking Finance Company. It was assessed u/s. 143(3) wherein it transpired that the assessee had made investments and it earned exempt income of Rs. 9.10 Lacs. Against the same, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of Ld. AO to record dissatisfaction, having regards to the accounts of the assessee, as to why the disallowance offered by the assessee was not acceptable. The failure to do so would make the disallowance bad in law. We find that no such dissatisfaction has been recorded by Ld. AO in the assessment order. Secondly, upon perusal of assessee's financial statements for the year ending 31.03.2011 & 31.03.2012 as placed on record, it could be seen that own funds in the shape of share capital and free reserves far exceed the investments made by the assessee and therefore, unless nexus of borrowed funds vis-à-vis investment was established by Ld. AO, a presumption would run in assessee's favor that the investments were sourced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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