2014 (3) TMI 425

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....Ld. CIT (A) is arbitrary, illegal and bad in law.        2. For that the Ld. C.I.T(A) erred in disallowing Rs.4,76,950/- from interest paid u/s. 14A thereby enhancing the' addition from interest disallowed by the AO at Rs. 276189/- ignor1ng the explanation filed and the evidences submitted. 3. For that the enhancement of the income is otherwise not in accordance with law since the appellant was not given any opportunity of being heard before making the enhancement. 4. For that the Ld. C.I.T(A) erred in retaining the addition of Rs. 276189/- being disallowed from interest paid by applying section 14A and further enhancing such disallowance by Rs. 200761/- when no part of the interest bearing loans was utilize....

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....est paid was directly attributable to the business of the assessee. It was submitted that no interest bearing fund had been used for making any investment from which the assessee had derived the dividend income. 5. It was the submission that on appeal before the learned Commissioner of Income-tax (Appeals), the learned Commissioner of Income-tax (Appeals) held that interest bearing funds have been used for investment in shares. It was the submissions that the learned Commissioner of Income-tax (Appeals) further proceeded to hold that the assessee had employed his capital of Rs.8.17 crores towards acquiring fixed assets, land, jewellery and advancing interest free loans to its related concerns and relatives, consequently, the overdraft and ....

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....g the expenditure directly relatable to the dividend income. 6. In reply, the learned CIT/DR has vehemently supported the orders of the Assessing Officer and the learned Commissioner of Income-tax (Appeals). 7. We have considered the rival submissions. A perusal of the assessment order shows that an amount of Rs.5345/- has been shown to the expenditure directly relating to the earning of dividend income. This amount was not dispute by the assessee. Further, a perusal of the assessment order shows that the Assessing Officer has treated the interest expenditure being not directly attributable to any particular income or receipt. Admittedly, O/D has been taken for the purpose of business, which has given rise to business income in the hands ....