2015 (10) TMI 1862

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....orted by an affidavit. Learned D.R. has no objection if delay is condoned. On perusing the statements made in the delay condonation petition and affidavit, we are satisfied that there was sufficient cause for belated ling of appeal. Hence, we condone the delay of 22 days and admit the appeal for hearing on merit. 2. The only effective ground raised by the assessee reads as under by- "1. .... 2. The Commissioner of Income-tax(Appeals) grossly erred in holding that interest of Rs. 2,41,59,811/- is not entitled to be capitalised and will not be entitled to depreciation thereon in subsequent years when such issue is not there before her. 3. ......" 3. Briefly the facts relating to the issue in dispute are : The assessee a company....

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.... was invested in mutual funds on which dividends were received. It was submitted that since the assessee during the year has not claimed any expenditure and no Profit and Loss Account was drawn up, no disallowance can be made under S.14A read with Rule 8D. The learned CIT(A), after considering the submissions of the assessee held as under- "4.4. The details on record are carefully considered. It is an admitted fact that certain loans were availed by the assessee and as the loans could not be utilised immediately, the funds were invested in mutual funds, on which dividends of Rs. 1,96,54,878/- were received. Therefore, the Assessing Officer was correct in disallowing expenditure u/s. 14A r.w. Rule 8D. However, since the business has not y....

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....t to notice for the first time before the Tribunal, it has to be verified by the Assessing Officer. 7. We have considered the submissions of the parties and perused the orders of the Revenue authorities and relevant material on record. The Assessing Officer has disallowed an amount of Rs. 2,41,51,811 under S.14A read with Rule 8D as expenditure incurred towards earning of exempt income. However, as can be seen from the finding of the learned CIT(A), though she has upheld the view of the Assessing Officer in disallowing expenditure incurred towards earning of interest income under S.14A read with Rule 8D, but at the same time she has held that such disallowance would not result in taxable income. As far as the decision of the learned CIT(....