TaxTMI 
TaxTMI 
2014 (4) TMI 104
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.... is opposed to law and facts and circumstances of the case. 2. The learned CIT(A) has erred in allowing relief to the assessee on the issue of disallowance u/s 14A r.w. Rule 8D without considering the facts and circumstances of the case and without appreciating the provisions of Rule 8D where in clause (ii) of sub-Rule (2) it is clearly laid down that interest expenses incurred on the general pool of loans are to be proportionately apportioned to exempt income as prescribed. 3. The Ld. CIT(A) has erred in holding that interest expenses of Rs 1,96,40,264/- are directly attributable to a particular income and therefore do not qualify to be apportioned as prescribed in clause (ii) of sub- Rule (2) of Rule 8D, wi....
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....king the investments. In view of the provisions of section 14A of the Act, the AO was of the view that the above investments would yield tax free dividend income and therefore expenses incurred in earning the tax free dividend income have to be disallowed. Accordingly, the AO issued show cause notice to the assessee, to which the assessee submitted that it had the following share capital and reserves & surplus as per the balance sheet as on 31.3.2009:- Share capital issued 201,25,38,711 Reserves & Surplus 181,16,07,538 Share holders fund & reserves 382,41,46,309 5. The assessee thus submitted that it was in possession of interest free funds to the above extent and no amount of borrowed capital can be attributed for maki....
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....(C) AXB = C (iii) Disallowance of expenditure 0.5% of Average Investment Average investment = As in (B) above 0.5% of Rs.35,69,26,819 Total disallowances (i+ii+iii) Rs.1,96,40,264 Rs. 17,84,634 Rs.2,14,24,898" 7. Aggrieved by the order of the AO, the assessee preferred appeal before the CIT(Appeals). The CIT(A) confirmed the order of the AO with regard to disallowance of overhead and administrative expenses under Rule 8D(2)(iii) of the Act. With regard to Rule 8D(2)(ii) of the Act, the CIT(A) held as follows:- "3.14 The submissions of the appellant have been considered with reference to the details available on record and it is sufficiently proved that borrowals are for the business purpose and they....
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....d the submissions of the ld. DR and the ld. counsel for the assessee. The ld. DR submitted that the CIT(A) has deleted the addition made by the AO under Rule 8D(2)(ii) of the Rules without any basis for coming to the conclusion that surplus funds had been utilized for making investments. It was further submitted that the CIT(A) had cast the burden of proving nexus between the borrowed funds and exempt investments on the revenue, whereas it is for the assessee to show that borrowed funds on which interest was paid had not been used for making investments which would yield tax free income. It was submitted by him that the matter may be remanded to the AO and the assessee should be asked to correlate the availability of surplus funds on the da....
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....Bank From others Deutsche Bank International Finance Corpn Ltd. Vehicle loan from Banks 100,81,60,114 40,42,86,648 21,97,63,651 20,20,52,536 4,88,87,928 2,50,00,000 Nil 27,82,22,700 50,54,00,000 7,31,25,267 48,86,158 Nil Nil 27,96,42,923 Nil 11,43,98,906 Nil 40,00,00,000 30,10,95,390 40,13,00,000 8,45,00,000 82,28,904 Total (A) 338,12,28,252 236,97,93,467 Unsecured loans Fixed deposits from public 10,26,55,000 9,40,59,719 Compulsory convertible debentures from DAMF II 56,78,34,400 56,78,34,400 Short term loan from a financial institution 50,00,00,000 Nil Other loans and advances F....