TaxTMI 
TaxTMI 
2016 (8) TMI 56
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....1961 (in short 'the Act') dated 18/03/2010. The Grounds of appeal raised by the assessee as well as the Revenue read as under:- Assessee's Grounds of Appeal: "On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)- 14 (CIT(A)): Disallowance under section 14A of Rs. 33,93,829/- 1. erred in confirming disallowance under section 14A of the Income-tax Act, 1961 ('the Act') of Rs. 33,93,8291- by invoking provisions of Rule 8D, without appreciating that no expenses have been incurred for earning exempt income and expenses were incurred only in relation to the appellant's business of construction and real estate development; 2. failed to appr....
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.... The assessee is a company incorporated under the provisions of the Companies Act, 1956, and is, inter-alia, engaged in the business of construction activity. For assessment year 2008-09, it filed return of income declaring a total income of Rs. 3,15,64,466/-, which was subject to scrutiny assessment whereby, the total income has been assessed at Rs. 4,24,98,864/-, after making disallowances out of interest/finance charges and under section 14A of the Act. In an appeal preferred by the assessee, the CIT(A) has allowed part relief, therefore, the assessee and the Revenue are in appeal challenging the order of the CIT(A) on respective Grounds of appeal. 3. In so far as the assessee's appeal is concerned, although multiple Grounds have been....
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....sessment year 2008-09. Against such a decision, assessee is in further appeal before us. 5. Before us, Ld. Representative for the assessee has reiterated all the submissions which were canvassed before the CIT(A). 6. On the other hand, the Ld. Departmental Representative has defended the orders of the authorities below by placing reliance on the same. 7. We have carefully considered the rival submissions. Pertinently, in this case, the primary plea of the assessee has been that during the year under consideration, it has not earned any exempt income in order to invoke the provisions of section 14A of the Act. In this context, the Ld. Representative for the assessee has placed reliance on the judgment of the Hon'ble Bombay High ....
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.... of own non-interest bearing funds. The Assessing Officer has noted in the assessment order that on being asked to furnish any nexus between the funds utilized and investments, the assessee failed to do so. The Assessing Officer further noticed that after raising of borrowed funds from L&T Infrastructure Finance Company Ltd. on 8/01/2008, assessee had made two investments namely,(i) Alspon Infrastructure- Rs. 10,60,00,000 on 25,26,27/3/2008; and (ii)Ashford Infotech (P) Ltd.- Rs. 50.00 crores on 25/02/2008. The Assessing Officer worked out proportionate interest on such investments and made a total disallowance of Rs. 69,50,569/- out of interest expenditure under section. 36(1)(iii) of the Act. A sum of Rs. 6,93,624/- related to investment ....
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....ombay High Court in the case of CIT. Vs. Reliance Utilities And Power Limited.,313 ITR 340(Bom), it was to be presumed that such investments are out of non-interest bearing funds, and, thus no interest was disallowable. The CIT(A) accepted both the pleas set up by the assessee and has deleted the addition. 12. Before us, the Ld. Departmental Representative has primarily relied upon the order of the Assessing Officer in support of the case of the Revenue, without controverting any of the factual matrix brought out by the CIT(A). Notably, the CIT(A) in para 3.9 of his order has referred to the fund flow statement furnished by the assessee whereby, assessee had owned interest free funds of Rs. 193.70 crores and investment in subsidiary was ....