TMI Blog2022 (1) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... substantive grounds for this precise reason alone and make it clear that it shall be very much open for the Assessing Officer to examine the issue afresh in the year of the assessee's deriving actual exempt income in light of all the corresponding financial as per law. This first and foremost substantive ground is accepted in foregoing terms. Interest disallowance u/s36(1)(iii) - HELD THAT:- CIT(A) has rightly invoked the impugned disallowance as the assessee could not prove the impugned expenditure to have been incurred wholly and exclusively for the purpose of its own business. The assessee's case on the other hand, quoted hon'ble apex court's landmark decisions in SA Builders [ 2006 (12) TMI 82 - SUPREME COURT ] and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax (Appeals) erred in sustaining the disallowance of ₹ 137,73,184/- (comprising of interest of ₹ 56,42,302/- Proportionate part of ₹ 167,01,148/- of interest expenses and 0.5% of average value of exempt investment at ₹ 81,30,882/-) made by the Assessing Officer u/s. 14A r.w.r. 8D stating that appellant made investments with an intention to earn exempt income, even though he has not earned any exempt income . In this connection, the appellant submits that (i) the expenditure debited to the profit and loss account was incurred in connection with making investments in subsidiary companies of the Appellant and the business of the Company was to invest in various Road projects and thus such expenditure was incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the impugned assessment year so as to set section 14A r.w. Rule 8D in motion. Case Law Cheminvest Ltd. Vs. CIT (2015) 378 ITR 33 (Del), CIT Vs. Corrtech Energy Pvt. Ltd. 223 Taxmann.com 130 (Guj) and CIT Vs. CIT Vs. Chettinad Logistics Pvt. Limited (2017) 80 taxmann.com 221 (Madras) holds that the impugned disallowance is attracted only in case an assessee derives exempt income and not otherwise. We thus accept the assessee's instant former substantive grounds for this precise reason alone and make it clear that it shall be very much open for the Assessing Officer to examine the issue afresh in the year of the assessee's deriving actual exempt income in light of all the corresponding financial as per law. This first and foremost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndmark decisions in SA Builders Vs. CIT 288 ITR 1 (SC) and Hero Cycles Pvt. Ltd. Vs. CIT 379 ITR 347 that commercial expediency is not merely restricted to assessee's own business but also includes its subsidiaries' business activities as well. Be that as it may, we note that CIT(A)'s order has simply brushed aside the assessee's contentions without examining the clinching commercial expediency in the impugned interest expenditure. We therefore deem it appropriate to restore the instant latter issue back to the Assessing Officer for his afresh factual adjudication of assessee's business expediency element in the impugned advances to its sister concerns to be decided within three effective opportunities of hearing. No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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