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TMI Blog2023 (9) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... the case and in Law, the CIT(A) was correct in holding that the AO has not recorded the satisfaction for disallowance u/s 14A r w Rule 8D? ii) Whether on the facts and circumstances of the case, the CIT(A) was correct in directing the Assessing Officer to restrict the disallowance to the amount of income claimed as exempt contrary to the provisions of Law? iii) Whether on the facts and circumstances of the case and in law, the CIT(A) was right in not appreciating the contents of the CBDT Circular No 5/2014 dated 11.02.2014? iv) For the above grounds and any additional grounds that may be agitated during the course of hearing." 2. At the outset, it is noticed that ITA No.489/Bang/2023 was filed by the revenue on 06.07.2023 in physical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 8D(2)(iii) with a total disallowance of Rs. 4,30,82,139 and other additions were also made by the AO. The assessee filed appeal before the CIT(Appeals). 5. The CIT(Appeals) after considering the detailed written submissions of the assessee restricted the disallowance to the extent of exempt income received by the assessee of Rs. 31,231 as dividend income. Aggrieved, the revenue is in appeal before the Tribunal. 6. The ld. DR relied on the order of the AO and submitted that the disallowance made by the AO is correct and he has recorded satisfaction that the assessee has incurred interest/indirect expenditure, therefore it cannot be said that the loan funds have not been utilized by the assessee. He also submitted that there is amendm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant's own case in ITA No.2488 and 2489/Bang/2017 dated: 26.2.2020, the disallowance has to be restricted to the extent of the income earned. As regards the nexus between the borrowed funds and making investment in M/s. Lakshmi Estates, the AO in her order dated 29.03.2019 for the assessment years 2009-10, 2010-11, 2011-12 and 2012-13, copies of which have been placed on record, has given a categorical finding that no borrowed funds were utilized for the purpose of making investment in the firm of M/s. Lakshmi Estate. 7.5 As observed by the Hon'ble High Court, the AO has not recorded satisfaction even for this year, with regard to claim of the appellant that it has not incurred any expenditure in order to earn exempt income. Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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