2014 (3) TMI 856

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....e assessee had made investment of Rs.2.75 crores and had also claimed interest expenses of Rs.72.08 lacs. The AO had only disallowed proportionate expenses under Rule 8D(2)(ii)(iii)? (B) Whether the Appellate Tribunal has substantially erred in deleting the disallowance of interest of Rs.3.94 lacs despite the fact that the assessee had claimed interest expenses of Rs.72.08 lacs and had given interest free advances of Rs..32.91 lacs to related parties. Interest expenses to that extent were therefore not deductible u/s 36(1)(iii)? 2. Counsel for the Revenue submitted that question no.2 is not pressed in this appeal since it does not arise out of the impugned judgement of the tribunal. 3. That leaves us only with one question which pe....

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....aim expenses relating to investments which will result only in exempt income. Therefore in the absence of clear cut details of utilisation of funds, the formula given in rule 8D which is mandatory this year is to be applied. Since assessing officer worked out interest disallowance as per rule 8D, the interest disallowance is confirmed. The ld AR submitted that this finding of ld. CIT(A) is containing to the law settled by various judicial pronouncements. We have given our thoughtful consideration to the facts and the decision relied upon by the ld AR. The Hon'ble Punjab & Haryana High Court in the case of CIT vs. Winsome Textile Industries Ltd. reported at (2009) 319 ITR 204(P&H) has held that in the present case, admittedly, the assesse....