2013 (2) TMI 479

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.... section 14A? B. Whether the Appellate Tribunal is right in law and on facts in setting aside the order of the CIT u/s.263 of the Act in so far as it relates to disallowance of Rs.11,09,000/- by applying provisions of section 36(i)(iii), in respect of interest paid for loan utilized for setting up a separate new unit for an altogether new product ?" We have heard learned counsel Mr.Manish Bhatt for the Revenue and with his assistance examined the orders of the adjudicating the authorities. It appears that for the assessment year 2000-01, the assessee company had invested Rs.1 crore from borrowed funds in equity of one M/s.Pankaj Extrusion Ltd. which was for the purpose of earning dividend income. Neither investment was made in the assess....

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.... that the assessee had not received any dividend income in the previous year as also the fact that there was no investment made by the assessee during the year under consideration. Submission of the assessee that investment had been made prior to the impugned assessment year as well as the fact that interest bearing fund invested in the shares yielded no dividend income, the Tribunal held that the interest paid on such loans cannot be disallowed by invoking the provisions of section 14A. As it emerges clearly from the record that the material which had been placed before the Tribunal had been relied upon for its conclusion. A sum of Rs.15 lacs was the interest on the borrowed fund invested from the dividend income which could not have been ....