TMI Blog2022 (4) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... AHMEDABAD] and 2014-15 [ 2020 (12) TMI 558 - ITAT AHMEDABAD] wherein on the same facts the disallowance made by the learned AO has been deleted and on that basis relying upon the same the learned CIT(A) deleted the addition made against the assessee. We have further considered the order passed by the Coordinate Bench in assessee s own case for Assessment Year 2013-14 and 2014-15 whereupon we find that the issue is identical and therefore, in our considered opinion the order passed by the Ld. CIT(A) in deleting the addition made by the Ld. Assessing Officer is just and proper so as to warrant interference. - Decided against revenue. Disallowance u/s 14A - assessee company had investment which yielded exempt income and the assessee has debited interest expense on borrowed funds.- HELD THAT:- We find that the Ld. CIT(A) considered the order passed by his predecessor on the similar facts on the identical issue in the appeal preferred by the assessee itself for A.Y. 2011-12 [ 2019 (2) TMI 1889 - ITAT AHMEDABAD] - We have further considered the order passed by the Coordinate Bench in assessee s own case for A.Y. 2013-14 [ 2019 (3) TMI 1836 - ITAT AHMEDABAD] and 2014-15 [ 2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books profits u/s under section 115JB of the Act. 3. Ground No. 1: Deletion of addition of ₹ 50,47,871 made by the assessing officer on account of disallowance of interest expenses under Section 36(1)(iii) of the Act is under challenge before us since the assessee has given interest free advance to various parties for acquiring immovable properties. 3. At the time of hearing of the instant appeal the representative of the revenue relied upon the order passed by the learned AO whereas the learned counsel appearing for the assessee submitted before us that this ground of appeal is squarely covered in favour of the assessee in assessee s own case for assessment year 2013-14, 2014-15 by the order passed by the Coordinate Bench; copy whereof has also been submitted before us. 4. The brief facts leading to the case is this that the assessee trading in bullion, diamonds, commodities, unit of mutual funds, shares and securities, speculation, futures and option transactions in brokerages, currencies filed its return of income for the year under consideration on 30.09.2015 declaring total income at ₹ 72,83,860 which was processed under section 143(1) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 ITR 222. Furthermore it was observed that the assessee s case is squarely covered in assessee s own case for Assessment Years 2011-12, 2012-13, 2013-14 and 2014-15 wherein on the same facts the disallowance made by the learned AO has been deleted and on that basis relying upon the same the learned CIT(A) deleted the addition made against the assessee. 8. We have further considered the order passed by the Coordinate Bench in assessee s own case for Assessment Year 2013-14 and 2014-15 whereupon we find that the issue is identical and therefore, in our considered opinion the order passed by the Ld. CIT(A) in deleting the addition made by the Ld. Assessing Officer is just and proper so as to warrant interference. Therefore, the ground of appeal preferred by revenue is found to be devoid of any merit and hence dismissed. 9. Ground No. 2: This ground relates to deletion of addition of ₹ 2,28,23,930/- made by the Assessing Officer under Section 14A of the Act. 10. During the course of assessment proceeding it was found that the company had invested an amount of ₹ 58,72,88,120/- which earned tax free income. A show-cause notice dated 27.11.2017 was issued dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PMZ Developers 33431950 0 6. SKZ Realties 150553597 0 7. Priyal Hydro 787245 0 8. Safal Homes LLP 20913241 73377612 Total 587288119 700048031 2.2 The Ld. AO has not appreciated the fact that from t he partnership firms and LLP, where the funds are invested and the company has received interest income of ₹ 172,84,784/- from partnership firms / LLP and share in profit / loss of ₹ 264,93,976/-. 12.3 The Ld. AO has not appreciated the fact that there are ample interest free funds with the appellant company, amounting to ₹ 63,22,59,453/- (Last year ₹ 63,76,88,389/-). The finding of such interest free funds are given on Pg. No. 3 para no. 3.2 of Assessment Order, the same is reproduced hereunder: Particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rities have correctly approached the issue by setting aside the order of disallowance under Section 14A of the Act in respect of interest expenditure. When the very basis for employing Section 14A of the Act on factual matrix is lacking, the disallowance to the extent of 10% of dividend income was not permissible. When it transpires from record that the assessee's own funds were at higher than the/investment made by it and with nothing to indicate that the borrowed funds were utilized for the purpose of investment in shares and for earning dividends, the Tribunal committed no error.... 12.7 The appellant company is partner in certain partnership firms/LLP, from where received taxable income in the form of interest income and tax free income in the form of share in profits. The partnership firms / LLP are having their own establishments to run business and there is merely transfer of funds, which no expenditure is incurred, no salary is given to director Sh. Pravin Majithia, who looks after such partnership firms/LLP. 12.8 The appellant also relied on certain judicial pronouncements which are as under: (i) CIT vs. Guiarat Industrial Development Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 13- 09-2017 (Paper Book Pg. No. 36 to 49) and in A Y 2014-15 by CIT(A)-7 in Appeal no. CIT(A)-7/274/2016-17 dated 03-10-2017 (Paper Book Pg. No. 50 to 63). where it is held that: 5.2 I have carefully considered the assessment order, facts of the case and the submissions made by the appellant. The AO made the impugned disallowance u/s. 14A read with 8D stating that the appellant had not proved that investments had been made out of interest free funds. I find that on identical facts, the appellant's appeal on this ground has been decided in its favour for the three years i.e. Asst. Years 2011-12, 2012-13 2013-14 wherein the ld. CIT(A) has held as under: 6.2 I have carefully considered the facts of the case, submission of the appellant as well as the case law relied upon by the appellant. Identical issue have come up before me for A.Y. 2012-13. The issue was already decided in favour of the appellant vide order No. CIT(A)-9/559/DCIT,Cir-3(1)(1)/14-15 for A.Y. 2012-13 dieted 15/10/2015. The concluding paragraph is reproduced as under- With respect to ground no.2, relating to disallowance of ₹ 23,14,254/- vis-a-vis the advances given for purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 355,47,224/- is paid on borrowings. The borrowed funds are utilized for business of trading in bullion, commodities and derivative business. The interest free funds are invested in partnership firms and LLP, therefore, for earning profit / loss from partnership firms, there is no interest expenditure and no any other expenditure, hence, no disallowance may kindly be made u/s. 14A, in view of decision of jurisdictional High Court in the case of CIT vs. Suzlon Energy Ltd. (2013) 215 taxman 272 as there are huge interest free funds, no disallowance may kindly be made. Furthermore, the facts of the case are identical as held by ld. CIT(A) in AY 2011-12 to AY 2014-15, it is prayed that disallowance made u/s. 14A of ₹ 228,23,930/- may kindly be deleted. 13. We have heard the rival submissions made by the respective parties, we have also perused the relevant materials available on record. We find that the Ld. CIT(A) considered the order passed by his predecessor on the similar facts on the identical issue in the appeal preferred by the assessee itself for A.Y. 2011-12 and 2012-13. We have further considered the order passed by the Coordinate Bench in assessee s own case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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