AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 1699
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..../- made on account of disallowance u/s 14A of the Act, without appreciating the fact that the disallowance of expenditure was made by the A.O. with respect to amount of interest expenses which were directly attributable to dividend income, which did not form part of total income. 2. The Ld. CIT (A) was not justified in law and on facts in deleting the addition of Rs. 67,75,000/- made on account of disallowance u/s 14 of the Act, without appreciating the fact that the A.O. has rightly disallowed the expenditure u/s 14A of the Act, on the basis of computation of disallowance made under Rule 8D of the I.T. Rules. 1962." 3. Learned D.R. of the Revenue supported the assessment order. He also placed reliance on the judgment of Hon'ble Calcu....
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....ion, this finding is given by learned CIT(A) that these investments were made out of own funds of the assessee company. These finding of facts given by learned CIT(A) could not be controverted by learned D.R. of the Revenue. Once it is established that no borrowed funds on which interest was paid has been invested for earning tax free income, no disallowance of any amount out of interest can be made u/s 14A even after insertion of Rule 8D. As per clause (ii) of sub Rule (2) of Rule 8D, proportionate disallowance out of interest expenditure is to be made in respect of those interest expenditures which are not directly attributable to any particular income or receipt. When in the facts of a given case, the entire interest expenditure is attri....
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....ot justified in law and on fact in deleting the addition of Rs. 1,50,62,605/- made by the A.O. as disallowance of interest claimed u/s 36 (1) (iii) of the Act, without appreciating the fact that the assessee failed to explain the specific business purpose for which the loans and advances were given to its sister concerns/ subsidiaries without charging interest from them." 7. Learned D.R. of the Revenue supported the assessment order whereas learned A.R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is covered in favour of the assessee by the Tribunal order in assessee's own case for assessment year 2003-04, 2004-05 & 2005- 06 in I.T.A. No.1187, 1188 & 1189/Del/2009 dated 11th Sept. 2009. He furthe....
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.... of closing stock. 6. The Ld. CIT (A) was not justified in law and on facts in deleting the addition of Rs. 41,63,50,331/- made on account of valuation of closing stock due to change in the method of computation of cost of sugar, without appreciating the fact that the assessee changed its method of valuation of stock from A.Y. 1989-90 as per which only direct expenses were included, whereas prior to A.Y. 1989-90 method of account followed by the assessee included the cost of direct as well as indirect expenses while valuing the closing stock." 10. Learned D.R. of the Revenue supported the assessment order whereas learned A.R. of the assessee supported the order of learned CIT(A). He also submitted that this issue is also covered in favour....
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....through the orders of the authorities below. We find that the disallowance was made by the Assessing Officer on the basis that the expenditure incurred by the assessee is of capital nature. As against this, the finding given by learned CIT(A) is that the assessee has right to use the power line for transmitting power generated in its factory to UPPCL but it would not enjoy ownership right on the asset. He has also given a finding that the ownership on the asset would be with UPPCL in future. He has also given a finding that the assessee acquired right to make use of the asset for facilitating efficient conduct of its business and making it more profitable but without getting any advantage of enduring benefit to itself and, therefore, the as....