TMI Blog2014 (11) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... s would show the half hearted approach adopted by the assessing officer and his carelessness in examining the workings furnished by the assessee vis- -vis the accounts of the assessee company. We also find that the assessee has also failed to explain as to how the provisions of sec. 14A shall not apply to the share income from partnership firms, which consisted of 99.5% of its income. The assessee has further canvassed the view that the provisions of sec. 14A r.w. Rule 8D should not be applied to Variable expenses, which consisted of expenses incurred directly on the projects undertaken by it. With regard to the Fixed/semi-variable expenses, the assessee submitted that the disallowance may be restricted to 5% of the said expenses. Though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income. The assessee furnished the workings as per which a sum of Rs. 1,51,35,812/- was disallowable and the same pertained to Administrative expenses only. The assessing officer accordingly made disallowance of the above said amount. In the appellate proceedings before Ld CIT(A), the assessee submitted that the investments are held in equity/preference shares of subsidiary companies /associate companies and also by way of capital investments in Partnership firm. Further it was submitted that the general and administrative expenses have to be incurred even if there are no investments. It was further pointed out that the assessee had agreed for disallowance of Rs. 20,70,770/- pertaining to 5% of the Fixed/semi-variable expenses, in its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following case law:- (a) Jt. CIT Vs. Shivam Motors Pvt Ltd (ITA No.17/Lkw/2012 dt. 12.11.13) (b) CIT Vs. Cortech Energy Pvt Ltd (2014)(223 Taxmann 130)(Guj) (c) CIT Vs. M/s Lakhani Marketing Inc. (ITA No.970/2008 dt.2.4.14) (d) CIT Vs. Holcim India P Ltd (ITA No.486/2014 299/2014) The Ld A.R took an alternative contention that all the investments made by the assessee, being strategic investments made in subsidiaries, joint ventures etc, the question of incurring administrative expenses does not apply. For this proposition, the Ld A.R placed reliance on the following case law:- (a) Garware Wall Ropes Ltd Vs. Addl. CIT (ITA No.5048/Mum/2012) (b) J.M.Financial Ltd Vs. Addl CIT (ITA No.4521/M/12) (c) ACIT Vs. Oriental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee to work out the disallowance and accordingly, the assessee has furnished following workings:- Average Investments:- Opening Investments 213,77,04,517 Add:- Share of loss in Partnership firm Included as balance of Capital a/c (added since does not represent an Investment) 13,04,47,866 ----------------------- 226,81,52,383 ============ Closing Investments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rking out the average value of investments. All these discussions would show the half hearted approach adopted by the assessing officer and his carelessness in examining the workings furnished by the assessee vis- -vis the accounts of the assessee company. We also find that the assessee has also failed to explain as to how the provisions of sec. 14A shall not apply to the share income from partnership firms, which consisted of 99.5% of its income. 8. Before the AO as well as before the Ld CIT(A), the assessee canvassed for segregation of all expenses into Variable expenses and Fixed/semi variable expenses . The assessee has further canvassed the view that the provisions of sec. 14A r.w. Rule 8D should not be applied to Variable expens ..... X X X X Extracts X X X X X X X X Extracts X X X X
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