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TMI Blog2025 (5) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act and iii. Rs. 2,71,362/- out of maintenance expenses. 3.1 On the other hand, the Revenue, vide five grounds, has also challenged following three disallowances deleted by the Ld. CIT(A): i. Rs. 3,13,30,219/- under section 14A of the Act, ii. Rs. 1,04,73,000/- out of staff welfare expenses and iii. Rs. 19,28,480/- out of maintenance expenses. 4. The relevant facts giving rise to these appeals are that the assessee, a Sugar Mill Company, filed its Income Tax Return (hereinafter, the 'ITR') on 17.10.2016 declaring Nil income as per normal provisions of the Income Tax Act and loss of (-) Rs. 3,92,12,53,873/- under section 115JB of the Act. The case was picked up for scrutiny. During the course of assessment proceedings, the Assessing Officer (hereinafter, the 'AO') noticed that the assessee, on one hand, had given interest free loans & advances of Rs. 15,46,50,000/- to its subsidiaries & sister concerns and on another hand, it had taken interest bearing loans & advances from banks and other for its business and paid interest of Rs. 619.21 million thereon. Therefore, the AO did not see any business prudence in such transactions. The AO did not get satisfied with the justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2025. 5.2 The Ld. AR further contented that the Courts had taken the consistent view that where the assessee's own funds were in excess of the interest free loans & advances, etc. no disallowance out of interest could be made. He placed reliance on following cases: (i) Woolcombers of India Ltd. 134 ITR 219 227 (Cal) (ii) Alkali and Chemical Corporation of India Ltd. 161 ITR 820 (Cal) (iii) Hotel Savera 239 ITR 795 799-800 (Mad) (iv) Radico Khaitan Ltd. 274 ITR 354 (All) (v) Britannia Industries Ltd. 280 ITR 525 (Cal) (vi) Reliance Utilities and Power Ltd. 313 ITR 340 (Bom) (vii) East India Pharmaceutical Works Ltd. 224 ITR 627 (SC) (viii) Munjal Sales Corporation 298 ITR 298 (SC) (ix) South Indian Bank Ltd. 438 ITR 1 (SC) 5.3 The Ld. AR contended that the Hon'ble Supreme Court in the cases of East India Pharmaceutical Works Ltd. (supra), Munjal Sales Corporation (supra) and South Indian Bank Ltd. (supra) had also approved the mixed fund theory, inasmuch as, in South Indian Bank Ltd. (supra), it had been held by the Apex Court that no disallowance of interest could be made where non-interest bearing funds were more than the investments made in tax free s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned Tribunal order dated 26.03.2025: "33.1 Grounds No.3, 3.1, 4 & 5 of assessee's appeal in AY 2011-12 is against upholding the action of the AO in making a disallowance u/s 14A read with Rule 8D. At the outset, ld. AR of the assessee submitted that undisputedly there is no exempt income earned by the assessee during the year under consideration, therefore, section 14A is not applicable. In this regard, he relied on the decision of Hon'ble Delhi High Court in the case of PCIT vs. Era Infrastructure India Ltd. In 448 ITR 674 (Delhi). On the other hand, ld. DR of the Revenue did not controvert this proposition. Accordingly, respectfully following the decision of Hon'ble Delhi High Court in the case of Era Infrastructure Ltd. (supra), we are inclined to delete the disallowance made by the AO and confirmed by the ld. CIT(A) and allow the ground of the assessee. ........... 39. The Revenue has taken the issue involving deletion of disallowance made u/s 14A of the Act in three AYs i.e.2012-13, 2014-15 & 2015-16. Since the issue involved is common we are taking the facts from AY 2012- 13 for the sake of brevity. 40. The Assessing Officer on examination of record see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We have given a thoughtful consideration to the entire facts of the case and submissions/contentions/arguments of both parties and are of the considered view that this issue is squarely covered by the decision of the coordinate bench of Tribunal in the assessee's own cases in the ITA Nos.6300 & 6301/Del/2015, ITA Nos.457 & 5830/DEL/2016, ITA Nos.5489 & 5490/DEL/2018, ITA No.516 & 6081/DEL/2016 and ITA No.5835 & 5836/DEL/2018. We therefore, following the reasoning given by the coordinate bench of Tribunal in the assessee's own cases in the ITA Nos.6300 & 6301/Del/2015, ITA Nos.457 & 5830/DEL/2016, ITA Nos.5489 & 5490/DEL/2018, ITA No.516 & 6081/DEL/2016 and ITA No.5835 & 5836/DEL/2018, set aside the finding of the Ld. CIT(A) on this score and decline to interfere with the finding of the Ld. CIT(A). Accordingly, this ground stands decided against the Revenue. 11. As far as the issue of relief of Rs. Rs. 4,42,817/- sought by the assessee on the reasoning that the assessee inadvertently made suo-moto disallowance of Rs. 4,42,817/- under section 14A of the Act in its Income Tax Return. We decline to accept the argument of the Ld. AR in this regard on the simple reasoning that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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