TaxTMI 
TaxTMI 
2017 (4) TMI 238
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....f the company has filed condonation petition dated 16.12.2016, wherein he has stated that the delay had occurred due to the mistake on the part of the staff of the appellant in understanding the order of the Ld. CIT(A) with respect to the issue of disallowance u/s.14A of the Act read with 8D of the Rules. It was therefore pleaded that the delay of 7 days in filing the appeal may be condoned. Though the Ld. DR vehemently opposed to the submission of the assessee, after considering the issue involved in the appeal and the delay in filing the appeal being short, we hereby condone the delay of 7 days in filing the appeal by the assessee and proceed to hear the matter on merit. 3. The assessee has raised several grounds in its appeal, however....
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....penditure. Therefore he disallowed the pooja expenses of Rs. 21,594/- and added to the income of the assessee. The Ld. CIT(A) also confirmed the addition because the assessee had not furnished any details with respect to pooja expenses in order to prove that it is not personal expenditure. We do not subscribe to this view of the Revenue authorities. In every business establishment it is customary to follow certain religious procedures in order to please the "Gods" for prosperity and development. Considering the nature and the turnover of the business, we are of the considered view that the amount spent by the assessee as pooja expenditure is quite meager and reasonable. Therefore, we hereby direct the Ld. AO to delete the addition of Rs. 21....
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....materials available on record. It is a normal practice to make investment in sister companies due to commercial exigencies. While doing so, no expense can be attributable other than interest expense for making such investments because all management costs will be absorbed for strategic decision making process which is allowable as business expenditure. In the case of the assessee it is submitted that no interest cost was incurred as the entire investments were made out of own funds. Further in the decision of the Tribunal in ITA No.115/Mds/2015 dated 06.01.2016, extracted herein below, it has been held that section 14A of the Act will not be applicable when investments are made in sister companies. "5. We have heard both the partie....
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....hich was for strategic purposes only, no disallowance of interest was required to be made under Rule 8D(i) & 8D(ii) and strategic investment has to be excluded for purpose of arriving at disallowance under Rule 8D(iii)." iii) M/s.JM Financial Ltd., Vs. ACIT reported in 2014-TIOL-202- ITAT-MUM held as follows: "...the department has not disputed this fact out of the total investment about 98% of the investment are in subsidiary companies of the assessee and, therefore, the purpose of investment is not for earning the dividend income but having control and business purpose and consideration. The assessee has brought out a case to show that no expenditure has been incurred for maintaining the 98% of the investment made in the....
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.... hotel industry. The assessee is not into the business of investment and the investments made by the assessee are on account of business expediency. Any dividend earned by the assessee from investment in subsidiary company is purely incidental. Therefore the investment made by the assessee in its subsidiary is not to be reckoned for disallowance U/s.14A r.w.r.8D. The Assessing Officer is directed to re-compute the average value of investment under the provisions of Rule 8D after deleting investments made by the assessee in subsidiary company." Taking note of the above decisions and the decision of the Chennai bench of the Tribunal in ITA No.156/Mds/13 cited supra, we hereby remit the matter back to the file of Ld. Assessing Officer....
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....bsidiary are not to be reckoned for disallowance U/s. 14A r.w.r. 8D. The Assessing Officer is directed to re-compute the average value of investment under the provisions of Rule 8D after deleting investments made by the assessee in subsidiary company - Decided in favour of assessee." For the above said reasons, we hereby hold that in the case of the assessee the provisions of Section 14A read with Rule 8D will not be applicable in regard to investments made for acquiring the shares of the assessee's sister concerns. Accordingly we restrain ourselves from interfering with the Order of the Ld.CIT(A) on this regard." 8. Therefore, following the aforesaid decision of the Tribunal, we hereby direct the learned Assessing Officer....