TMI Blog2022 (1) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... ncrease in the non-current investments and further, there is increase in the own funds, which is evident from trading and P L Account of the assessee, which is more than the investments made during the year. After considering the sale of investments and also perusing the orders of coordinate bench for AYs quoted supra wherein the coordinate bench held that the assessee had made the investments out of own funds of the assessee company, we direct the AO to delete the addition made under rule 8D(2)(ii). Disallowance under rule 8D(2)(iii) - contention of the assessee is that it has not incurred any expenditure for earning exempt income is also not tenable because for earning of income maintaining portfolio, administrative involvement and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the Revenue is directed against CIT(A) - 1, Hyderabad s order dated 08/12/2017 for AY 2013-14 involving proceedings u/s 143(3) of the Income Tax Act, 1961 ; in short the Act on the following grounds of appeal: 1. The order of the learned CIT(A) not only is erroneous both on facts and in law but is contrary to the settled principles of law and is passed without application of mind. 2. The learned CIT(A) erred in confirming the action of the AO in disallowing ujs.14A of ₹ 53,56,654 contrary to the decision of the Supreme Court in the case of M/s.Godrej Boyce Mfg., Ltd., without appreciating that the AO has not made such disallowance for the immediately preceding assessment year and has not recorded any satisfaction t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of CIT(A) the assessee is in appeal before us. 4. Assessee has raised 4 grounds of appeal, out of which ground Nos. 1 4 are general in nature, hence, need no adjudication. 5. As regards ground No. 2 relating to disallowance of ₹ 53,56,654/- u/s 14A of the Act, during the assessment proceedings, the Assessing Officer noticed that the assessee had made investments in the shares of other companies amounting to ₹ 91,96,90,136/- and earned dividend of ₹ 3,30,08,537/-. The AO noted that the assessee company had capital of ₹ 1,09,22,89,OOO/- reserves of ₹ 71,55,02,458/-. The borrowings during the year were ₹ 9,06,46,007/-. Further the interest paid during the year is ₹ 22,12,500/-. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that in earlier years, the issue was decided in favour of the assessee by the Hon'ble ITAT for the AY 2008-09 to AY 2010-11 in ITA No.1475 to 1477/Hyd/2013 and ITA No.1561 to 1563/Hyd/2013 dated 30.09.2014 and the decision was accepted by the Department. The appellant submitted that in the earlier AYs i.e., AY 2011-12 and AY 2012-13, no such disallowance was made. 5.3 The CIT(A) after considering the submissions of the assessee, confirmed the disallowance by holding that the assessee having earned dividend income, cannot claim that section 14A is not applicable. 5.4 Before us, the ld. AR of the assessee besides reiterating the submissions made before the lower authorities submitted that the assessee had sufficient own funds, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is increase in the own funds by ₹ 7,21,59,927/-, which is evident from trading and P L Account of the assessee, which is more than the investments made during the year. After considering the sale of investments of ₹ 74,76,610/- (61,81,200 + 12,95,410) and also perusing the orders of coordinate bench for AYs quoted supra wherein the coordinate bench held that the assessee had made the investments out of own funds of the assessee company, we direct the AO to delete the addition of ₹ 8,17,998/- made under rule 8D(2)(ii) of the Act. 5.6.2 With regard to the disallowance of ₹ 45,38,656/- under rule 8D(2)(iii), to arrive the said figure, the AO has taken average value of the entire investments as on the date of the bala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted any evidence in support of its claim. Therefore, the Assessing Officer treated ₹ 20,57,266/- as Income from capital gains. 6.1 The CIT(A) confirmed the addition on the ground that the assessee did not submit any documentary evidences regarding purchase and sale of shares neither before the AO nor before him and, in the absence of the same, the contention of the assessee was rejected. 6.2 Before us, the ld. AR of the assessee submitted that the matter may be restored to the file of the AO to substantiate its claim by way of documentary evidence to enable the AO to calculate the exact capital gains. The ld. DR, did not object to the submissions of the ld. AR. 6.3 Considering the prayer of the ld. AR of the assessee, we r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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