2015 (1) TMI 1286

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....e Income-tax Act, 1961 (hereinafter referred to as "the Act") for Assessment Year 2008-09 vide his order dated 30.12.2010. 2. The first issue in this appeal of revenue is against the order of CIT(A) deleting the disallowance of bank charges and interest amounting to Rs. 12,20,049/- as against the disallowance made by AO at Rs. 18,37,293/- by invoking the provisions of section 14A of the Act read with Rule 8D(2)(ii) & (iii) of the I. T. rules, 1962 (hereinafter referred to as the Rules). For this, revenue has raised following two grounds: "1. That the facts and circumstances of the case CIT(A) erred in excluding interest of Rs. 36,72,000/- being paid to bank while quantifying amount of expenditure by way of interest. 2. ....

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....6,84,21,046/- as against Rs. 6,98,91,467/- adopted by assessing officer since he wrongly considered the value of land for Rs. 14,70,421/-. The assessing officer also wrongly considered the bank charges of Rs. 12,20,049/- as part of interest. Assessee in the business of mining and sale of coal with turnover of Rs. 45.73 crores. It is contended by A/R that the secured loan was utilized for the purpose of acquisition of assets related to mining business so interest paid to bank should be excluded while computing the disallowance under Rule 8D, keeping the above facts and circumstances the interest paid to others of Rs. 15,84,657/- on loans raised under the head unsecured loans raised (Schedule -18) is relatable to investment on which exempt di....

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....coal where the assessee's turnover is more than Rs. 45.73 cr. We find from the accounts of assessee that it has been demonstrated by Ld. Counsel for the assessee that the major secured loans were utilized for the purpose of acquisition of assets relating to mining business and interest paid to the bank is for the purpose of business and not for the purposes of acquiring assets giving exempted income. Accordingly, we are of the view that the CIT(A) has rightly made disallowance of interest and bank charges to the tune of Rs. 12,20,049/- and we confirm the same. This issue of revenue's appeal is dismissed. 5. The next issue in this appeal of revenue is against the order of CIT(A) deleting the disallowance made by AO on account of provision....

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....;ble Supreme Court has stayed this judgment of Hon'ble jurisdictional High Court vide order 08-05-2009 by following observations:- "Pending hearing and final disposal of the Civil Appeals, Department is restrained from recovering penalty and interest which has accrued till date. It is made clear that as far as the outstanding interest demand as of date is concerned, it would be open to the Department to recover that amount in case Civil Appeal of the Department is allowed. We further make it clear that the assessee would, during the pendency of this Civil Appeal, pay tax as if section 43B(f) is on the Statue Book but at the same time it would be entitled to make a claim in its returns." In view of the above, Ld. counsel for ....