2013 (1) TMI 908

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....n the appeal of the assessee, following additional ground was raised as under which stood remitted on 10.12.2009: "That on facts and circumstances of the case, the appellant should have been held entitled to set off of carried forward business losses against the assessed income for the year under consideration." 2. Facts indicate that the appeal was filed against order dated 28.12.2006 passed u/s 143(3) of the I.T. Act, 1961. There was only one issue in this case i.e. against disallowance of interest amounting to Rs. 97,87,517/- by invoking the provisions of section 14A of the I.T. Act. The Assessing Officer observed that the assessee had invested Rs. 17,36,89,230/- in purchase of shares earmarked as other than trade - long term investme....

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....r 2002- 03 which was claimed as exempt. Accordingly, the Assessing Officer disallowed the interest and other administrative expenses by applying the provision of section 14A against which the appeal is pending before the ITAT. In the light of these facts, learned AR argued that the disallowance u/s 14A in this year is not justified and the same is liable to be deleted. (iv) That the appellant had earned interest income to the extent of Rs. 100.78 lakhs against the loan and advances while the interest was paid to the extent of Rs. 121.03 lakhs. Thus, the net interest expenditure was debited to the expenditure of Rsd.20.25 lakhs. Accordingly, the learned AR emphasized that if at all the proportionate interest is found to be disallowable, th....

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....nt Ltd., cited supra to decide the issue afresh. 6. Ld.DR could not controvert this factual aspect of the matter and rather submitted that the matter can be restored back on the file of the Assessing Officer for reconsideration of the issue afresh. 7. After having heard both the sides and considering the material on record, we find that issue in relation to disallowance under section 14A of the I.T. Act, 1961, the jurisdictional High Court in the case of Maxopp Investment Ltd.(supra) has observed as under: "Section 14A of the Income Tax Act, 1961, read with Rule 8D of the Income Tax Rules, 1962 - Expenditure incurred in relation to income not includible in total income - Whether in terms of section 14A(2) condition precedent for Assessi....