TaxTMI 
TaxTMI 
2014 (12) TMI 340
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....disposal by this common order. First we take up the Revenue's appeal bearing ITA No.1792/M/2013. ITA No.1792/M/2013 2. Revenue has taken the following grounds of appeal: "1. Whether on the facts and circumstances of the case and in law, the ld. CIT (A) was justified in deleting the addition of Rs. 17,06,049/- made u/s. 14A r.w. Rule 8D(2)(ii), without appreciating the fact that there is no evidence furnished by the assessee to prove that the borrowed funds on which interest is paid by it, are directly attributable to earning of taxable income only. 2. Whether on the facts and circumstances of the case and in law, the ld. CIT(A) was justified in deleting the addition made under rule 8D(2)(ii) without appreciating the fact that....
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.... capital expenditure having enduring benefit. 6. The appellant prays that the order of CIT(A) on the above ground be set aside and that of the Assessing Officer be restored. 7. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." Grounds No.1 & 2: 3. A perusal of above reproduced grounds No.1 & 2 reveals that the issue involved therein is relating to disallowance under section 14A read with Rule 8D(2). 4. The Assessing Officer (hereinafter referred to as the AO) made the disallowance of interest expenditure holding that the interest bearing funds were used for earning of exempt income. The AO also made the disallowance on account of administrative and managerial expenses under R....
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....round No.3 8. Vide ground No.3, the Revenue has agitated the deletion of disallowance relating to addition made by the AO on account of late deposit of Employees' Contribution to Provident Fund. The AO had made the disallowance observing that the contribution to Employees' Provident Fund was paid by the assessee after the due date as specified in explanation to section 36(1)(va). 9. The Ld. CIT(A) deleted the said disallowance while relying upon the decision of the Hon'ble Supreme Court in the case of "CIT vs. Alom Extrusions Ltd." reported in 185 Taxman 416 (SC) wherein the Hon'ble Supreme Court has held that the effect of deletion of second proviso to section 43B of Finance Act, 2003 is retrospective therefore, the assessee would be....
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....of money lending or that the loans were advanced in the ordinary course of business. He therefore treated the said amount of Rs. 1,00,00,000/- as deemed dividend under section 2(22)(e) of the Act. The Ld. CIT(A) while deleting the said disallowance observed from the facts and evidences produced before him that the payee company was a public limited company, hence the provisions of section 2(22)(e) were not attracted to the said company. He further observed that the amount in question was not in the form of loan or advance but it was inter-corporate deposit upon which the interest payment had been made by the assessee after deducting TDS as per law. He further, after going through the explanation submitted by the assessee, observed that the ....
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....re was not incurred for obtaining club membership. After considering the overall facts and circumstances of the case, he held that the said expenditure was allowable as revenue expenditure. 15. After considering the rival submissions of the ld. representatives of both the parties, we do not find any infirmity in the well reasoned order of the Ld. CIT(A) on this issue also. The expenditure was never incurred for obtaining the membership/entrance fees of the club. It has been observed by the Ld. CIT(A) that the expenditure was incurred by the directors for the purpose of promoting the business activity of the company and thus the expenditure was revenue in nature. The order of the Ld. CIT(A), thus, on this issue, is upheld. Grounds No.6 & ....
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....e 8D(2)(iii). If the assessee has offered any disallowance under rule 8D(2)(i) that itself does not create any bar upon the revenue authority in disallowing any expenditure under rule 8D(2)(iii) in the facts and circumstances of the case. This ground is accordingly decided against the assessee. 20. So far the alternative ground taken by the assessee that the disallowed amount be capitalized along with cost of investment and be allowed as deduction in the year of transfer of such investments, in our view, has also no force. The assessee during the year has earned substantial dividend income of Rs. 95,88,566/- and long term capital gains of Rs. 1,22,49,796/- which had been claimed as exempt under section 10(38). The disallowance of expendi....