TaxTMI 
TaxTMI 
2014 (7) TMI 421
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....me Tax Act, 1961 (the Act) read with Rule 8D of the Income Tax Rules, 1962 (the Rules); B) Assessment of Rs. 40,663/- as undisclosed income. 3. The facts relating to the issues cited above are discussed in brief. During the year under consideration, the Assessee filed his return of income declaring total income of Rs. 20,16,527/- and the income were declared under the heads "income from business" and "income from other sources". The assessing Officer noticed that the assessee has received tax free incomes like dividend on shares, interest on PPF, interest on NSS and long term capital gains (LTCG). He noticed that the assessee did not disallow any expenditure relatable to the tax free income as per the requirement of sec. 14A of the Ac....
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..... Counsel for the Assessee submitted that the assessee has made the impugned investment in a company named M/s Rajvir Industries Ltd during the financial year 2006-07. He further submitted that the above said investment was made by withdrawing funds from his Capital account in a partnership concern named M/s Nathlal Shivlal, in which the Assessee is a partner. Inviting our attention to pages 47 to 64 of the paper book, which contains the bank account copy of the partnership concern cited above and also his Capital account copy, the ld. Counsel of the assessee submitted that the Assessee has explained these factual aspects before the ld. CIT(A) by filing relevant documents and contended before him that the impugned investment was made out of....
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....hed finality. The ld. DR further submitted that the Balance sheet furnished by the Assessee shows that the assessee has borrowed funds and paid interest thereon. Accordingly he submitted that the contention of the assessee requires examination at the end of the assessing officer. By placing reliance on the decision of the Hon'ble jurisdictional Bombay High Court in the case of Godrej and Boyce Mfg. Co. Ltd (2010)(328 ITR 81), the Ld D.R submitted that the disallowance prescribed u/s 14A is mandatory and hence the Ld CIT(A) was justified in sustaining this disallowance. 6. We have heard the rival contentions on this issue. It is a fact that the Ld CIT(A), in the succeeding year, has accepted the fact that the investment cited above was ma....
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....hreeji Textiles. Hence, in our view, the contention of the assessee requires critical examination. In our view, one can accept the claim of the assessee that the investment has been made out of own funds only after examination of the relevant money transactions. A perusal of the assessment order would show that the assessing officer has made the impugned disallowance without considering the submissions of the assessee. Accordingly, we are of the view that this issue requires fresh examination at the end of the assessing officer by duly considering the submissions made by the assessee. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to examine the issue afresh by du....
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....imply because the debtors have deducted TDS on the accrued interest, despite the fact that they have stopped paying interest. 10. On the contrary, the Ld D.R submitted that the assessee is following mercantile system of accounting and hence the interest accrued should have been declared by the assessee. He further submitted that the assessee has agreed to the assessment of the different amount of interest on a conditional basis. Accordingly he submitted that the Ld CIT(A) was justified in assessing the difference amount of interest. 11. We have heard the rival contentions and perused the record. We notice that the ld CIT(A) has observed that the different amount of interest needs to be assessed in the hands of the assessee, since the ....