TaxTMI 
TaxTMI 
2016 (9) TMI 1211
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....reinafter "the Act") dated 22-03-2013. 2. The first issue in this appeal of the assessee is against the order of the CIT (A) confirming the disallowance of expenses relatable to exempted income by invoking the provisions of Section 14A of the Act read with Rule 8D (2) (ii) of the Income Tax Rules, 1962 (hereinafter "the Rules") at Rs. 10,49,330/-. 3. Briefly stated facts are that the assessee has earned dividend income of Rs. 3,95,624/- and claimed the same as exempt. Admittedly, this income does not form part of the total income. The AO by invoking the provisions of Section 14A of the Act read with Rule 8D of the Rules made disallowance of total expenses of Rs. 11,02,270/- as under:- (i) The amount of expenditure directly relat....
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....6/-. Before the CIT (A) the assessee also contended that the AO has not dealt with the submissions of availability of funds and investment in shares vis-à-vis the nexus of investment. According to him, the AO applied Rule 8D of the Rules mechanically and without recording of any satisfaction. The learned Counsel for the assessee before the CIT (A) also relied on the decision of the Hon'ble Bombay High Court in the case of CIT Vs Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom.) and also recent judgment of the Hon'ble Bombay High Court in the case of CIT Vs HDFC Bank Ltd. (2014) 366 ITR 505 (Bom.). But, neither the CIT (A) nor the AO has dealt with the issue of availability of funds and the CIT (A) just confirmed the addition.....
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....ase is squarely covered by the decision of the Hon'ble Bombay High Court in the case of HDFC Bank Ltd. (supra) wherein the Hon'ble High Court has held as under:- "If there be interest-free funds available to an assessee sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest-free funds available. In our opinion, the Supreme Court in East India Pharmaceutical Works Ltd. v. CIT (1997) 224 ITR 627 had the occasion to consider the decision of the Calcutta High Court in Woolcombers of India Ltd. (1982) 134 ITR 219 where a similar issue had arisen. Before the Supreme Court it was argued that it should have been presumed that in essence and true ....
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....e above decision of the Hon'ble Bombay High Court in the case of HDFC Bank Ltd. (supra), we allow the ground of appeal of the assessee. 5. The next issue in this appeal of the assessee is against the order of the CIT (A) confirming the action of the AO in disallowing depreciation of Rs. 5,61,644/- on motor car by holding that the car is registered in the name of one of the directors and legal ownership is not in the name of the Assessee Company. 6. We have heard the rival contentions and gone through the facts and circumstances of the case. Admittedly, the AO was of the view that motor car is declared by the assessee in its balance sheet and in the schedule of fixed assets. It is also admitted position that the funds utilized for purc....