TaxTMI 
TaxTMI 
2013 (10) TMI 382
X X X X Extracts X X X X
X X X X Extracts X X X X
....d on behalf of the assessee-appellant, it was submitted by the ld. Authorized Representative (AR), its counsel, that though the assessee impugns the entire disallowance of Rs.19,06,722/- effected u/s.14A of the Act, since confirmed by the ld. CIT(A), it has no grievance and, rather, concedes to the validity to the said disallowance in-so-far as it relates to indirect expenditure, computed with reference to Rule 8D(2)(iii) at Rs.8,32,149/-. The assessee's grievance and arguments would, thus, be confined to the balance amount of Rs.10,74,572/-, and which is in respect of interest on the investments held by the assessee during the previous year. The same is not valid in-as-much as the assessee has, as against an average investment of Rs.108.97....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iness purposes, i.e., toward financing its working capital, viz. stocks, debtors, etc. There could be under the circumstances no inference of borrowed capital having been deployed for investment in shares and securities yielding tax exempt income by way of dividend as also long term capital gain (LTCG). 2.2 The ld. Departmental Representative (DR) would, on the other hand, submit that the onus to exhibit the nexus between the borrowings and the avenue/s of their investment/application is only on the assessee, failing which the prescription of the rule, which is based on the common pool of funds hypothesis, would apply. The assessee has nowhere been able to exhibit the purpose for which the borrowings have been taken and, further, their act....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2010] 328 ITR 81 (Bom). Coming to the facts of the instant case, the assessee pleads of sufficient capital being available with it, so that the investments under reference stand financed there-from. Following the same logic, therefore, even the advance/s to sister concern/s, on which it has received interest at Rs.202.70 lacs for the year, has also been financed from own capital, and there is no basis to claim that the borrowed funds from the bank/s have been lent to the sister concern/s, so as to set off the interest suffered against the interest received on loans to the said concern/s. The said argument, i.e., of set off of the interest received against that paid, it would be noted, also contradicts the assessee's claim of the secured (b....