2016 (7) TMI 1256

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....set, there is a delay in filing the appeal before us by the revenue by 26 days, for which a condonation petition was filed by the revenue explaining the reasons for the delay. The ld AR fairly conceded to condone the delay. In view of the same, the delay in filing the appeal by the revenue is hereby condoned and the appeal is hereby admitted for adjudication. 3. The only issue to be decided in this appeal is as to whether the ld CITA is justified in deleting the disallowance made u/s 14A of the Act in the sum of Rs. 92,89,825/- made in the proceedings initiated u/s 154 of the Act in the facts and circumstances of the case. 4. The brief facts of this issue is that the assessee is a public limited company engaged in various businesses viz. ....

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....sessee had failed to prove that whether the loan borrowed were utilized only for fixed assets or investments and this aspect requires examination and accordingly prayed for setting aside to the file of the ld AO. In response to this, the ld AR argued that the assessee had borrowed only term loan and the same could not be utilized other than the intended purpose and admittedly the intended purpose is not for making investments. Moreover the availability of own funds with the assessee company is not in dispute and hence, the ld CITA had rightly appreciated the contentions of the assessee and deleted the addition. He further argued that the ld AO did not even reduce the disallowance already made by the assessee voluntarily in the return to the....

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....apital used for purposes of business - interest deductible under Income Tax Act , s. 36(1)(iii). G.D. Metsteel Pvt Ltd vs ACIT reported in 142 TTJ 641 (Mumbai Tribunal) Held that the investments are made by the assessee's own funds and have been made in the earlier years, no disallowance u/s 14A is required to be made. The Head Note reads as under:- "Business expenditure - Disallowance under section 14A - Apportionment of expenditure - When investments are made from own funds, merely because the assessee had to subsequently borrow the funds for business use, it cannot be said that the borrowed funds have been used for the purposes of investments." CIT vs HDFC Bank Ltd reported in 366 ITR 505 (Bom) Held, dismissing the appeal, (i) that ....