TaxTMI 
TaxTMI 
2013 (2) TMI 728
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....against the orders passed by the Commissioner of Income-tax(Appeals)-V at Chennai on 31.1.2012, 6.2.2012 and 31.1.2012 respectively. The assessments in these cases have been completed under sec. 143(3) of the Income-tax Act, 1961. 2. First, we will consider the appeal filed by the assessee for the assessment year 2005-06 in ITA No.638/Mds/2012. 2.1. First issue raised by the assessee is against the disallowance of Rs. 1,72,02,624/- being interest payment in respect of loans utilized for acquiring shares of Shriram Investments Limited and Shriram Transport Finance Company Limited. It is the case of the assessee that sec.14A is not applicable in respect of the above interest payment. It is also the case of the assessee that the investme....
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.... investment irrespective of the fact that the income arising out of such investment will be exempted from taxation. The Tribunal relied on the judgment of the Hon'ble Supreme Court in the case of SA Builders Ltd. vs. CIT and another reported in 288 ITR 1. 2.4. We find that this issue of disallowance of interest to the extent of Rs. 1,72,02,624/- is covered by the above said order of the Tribunal passed in assessee's own case. It is to be seen that the business of the assessee is investment in shares. It is in the course of carrying on of the said business that the assessee has invested in shares of Shriram Investments Limited and Shriram Transport Finance Company Limited. Whether the dividends arising out of those shares will be exempted....
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....ts and circumstances of the case, the investments being made as a business proposition and in the light of the decision of the Tribunal rendered in assessee's own case for the earlier assessment year 2002-03, we hold that the lower authorities have erred in disallowing Rs. 1,72,02,624/- against the claim of expenditure made by the assessee under the head interest. This disallowance is accordingly deleted. 2.7. The second issue raised in the appeal is regarding disallowance of Rs. 22,98,746/- being 2% of the dividend income earned by the assessee. The assessing authority has disallowed an amount of Rs. 22,98,746/- as expenditure attributable to dividend income earned by the assessee. It is the case of the assessee that the disallowance ma....
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....und is partly allowed. 2.10. The third issue raised by the assessee in the appeal is that the Commissioner of Income-tax(Appeals) has erred in confirming the disallowance of Rs. 71,164/- being interest paid on borrowings as relating to interest free advances to M/s. Shriram Cybertech (P) Ltd. It is the case of the assessee that the interest of Rs. 71,164/- on overdraft during the relevant previous year was in fact for the funds utilized for the assessee's own business. These are all matters reflected in the books of account of the assessee. We find no reason to reject the explanation offered by the assessee. Accordingly, the disallowance of Rs. 71,164/- is deleted. 3. Thus, this appeal filed by the assessee for the assessment year 200....
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....14A are not applicable in respect of that expenditure. 4.3. The assessee also argues that the reliance placed by the Commissioner of Income-tax(Appeals) on the Special Bench decision of the Tribunal in the case of Chem Invest Limited vs. ITO (121 ITD 318) has not considered the applicability of sec.14A in a situation where the expenditure is in respect of an item which can give rise to both exempt and non exempt income. 4.4. The very same issue is considered and discussed by us in detail while dealing with the appeal filed by the assessee for the assessment year 2005-06 in ITA No.638/Mds/2012. It is to be seen that the business of the assessee is investment in shares. It is in the course of carrying on of the said business that the as....
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....e assessee is regarding the disallowance of Rs. 50,000/-, which relates to general and administrative expenses pertaining to dividend income and investments in the past year. For the reasons stated in our order for the assessment year 2005-06 in ITA No.638/Mds/2012, we uphold the above disallowance and it is confirmed. 6.3. The third ground raised by the assessee is that the Commissioner of Income-tax(Appeals) has erred in confirming the addition of Rs. 20,16,375/- in the computation of income under sec.115JB. The above amount is made up of Rs. 19,66,375/- being the interest and Rs. 50,000/- being general and administrative expenses. The disallowance of Rs. 19,66,375/- has already been deleted by us. Therefore, that cannot be added while....