Tribunal partially rules in favor of Assessee in tax appeal, upholds disallowance & interest issues

The Tribunal partly allowed the Assessee's appeal and dismissed the Revenue's appeal regarding cross appeals against the CIT(Appeals) order for the Assessment Year 2009-10. The disallowance under section 14A read with Rule 8D(2)(iii) was upheld, with certain investments excluded. The Tribunal agreed with the Assessee on the issue of interest disallowance, referencing relevant case law. The Revenue's challenge regarding exclusion of certain investments was also dismissed, directing a re-computation of the disallowance. The judgment was pronounced on 29th January 2016.

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Issues involved:
Cross appeals by Revenue and Assessee against CIT(Appeals) order for Asst. Year 2009-10.

Assessee's Appeal:
1. Disallowance u/s 14A read with Rule 8D.
- Assessee argued investments made from own funds, no disallowance warranted.
- CIT(A) upheld disallowance, citing Reliance Utilities & Power Ltd. case.
- Assessee claimed investments made from share capital and reserves, no interest disallowance.
- Tribunal referred to HDFC Bank Ltd. and Centrum Direct Ltd. cases, agreed with assessee, no interest disallowance.
- Disallowance u/s 14A r.w. Rule 8D(2)(iii) upheld, certain investments excluded.

Revenue's Appeal:
1. General opposition to CIT(A) order.
2. Disallowance u/s 14A r.w. Rule 8D.
- Revenue challenged exclusion of foreign company investments and share application money from disallowance.
- Tribunal upheld exclusion based on Strides Arcolab Ltd. case, investments not generating exempt income.
- Dismissed Revenue's appeal, directed to re-compute disallowance.

In conclusion, Assessee's appeal partly allowed, Revenue's appeal dismissed. Tribunal upheld disallowance u/s 14A r.w. Rule 8D(2)(iii) while excluding certain investments. The judgment was pronounced on 29th January, 2016.

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