TaxTMI 
TaxTMI 
2014 (7) TMI 1113
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....nstant appeal is with regard to the disallowance u/s.14A, having been confirmed; rather, enhanced in certain respects, by the ld. CIT(A), so that the assessee is in second appeal. 2.2 We may, to begin with, capsule the status of the disallowance as it has transverse upto the present stage: - The assessee's objections 3. The assessee's objections, as made out before us, furnishing synopsis of the balance-sheets as at the year-ending 31st March, 2007 to 2009 and the corresponding fund flow, i.e., for financial years (f.ys.) 2007-08 & 2008-09 (Annexure A), drawn with reference thereto, was along the following lines: a) the interest expenditure incurred and claimed is, apart from unsecured loans, also on car and housing loans, which t....
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....Department. 4.2 We shall, accordingly, answer the issues arising before us in terms of the broad principles, issuing statement where consider necessary and relevant for being followed/adopted: a) the fund flow statements, stating the course of the fund flow for the relevant years, would need to be examined to identify and determine the avenue of the various sources of funds, giving the initial financial position as on 31.03.2007; b) the interest paid is to be identified in terms of the :- investments in loans yielding interest (at Rs. 1.57 lacs and Rs. 7.67 lacs respectively for the two successive years in appeal); investment in non-interest bearing loans; investment in other assets yielding income not forming par....
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....ble detail (refer para 85, 86 at pgs. 135-136), would have to be borne in mind, particularly with regard to the fund position as obtaining as at the beginning of the year. Further, as explained by the Tribunal in the case of Dy. CIT vs. Damani Estates and Finance P. Ltd. [2013] 25 ITR (Trib) 683 (Mum.) and per the Third Member decision in D. H. Securities Pvt. Ltd. v. Dy. CIT [2014] 146 ITD 1 (Mum), the interest on investment in shares held as stock-in-trade, in-as-much as it yields both tax-free (dividend) and taxable income (share trading profit), is to be disallowed u/s.14A at the rate of twenty per cent. (20%) of such interest. d) the assessee shall be provided an opportunity to establish its claim/s with regard to the indirect, admini....