TaxTMI 
TaxTMI 
2017 (6) TMI 228
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.... properly appreciating the factual and legal matrix as clearly brought out by the Assessing Officer. (ii) The Learned CIT(A) has erred on facts and in law, in deleting the disallowance of Rs. 8,58,32,156/ - under section 14A r.w. Rule 8D, by relying upon Hon'ble ITAT's decision in the case of Garware Wall Ropes Ltd, wherein depa.rtmenthas not accepted the decision and filed an appeal before the Hon'ble Bombay High Court which is admitted. (iii) The Learned CIT(A) has erred on facts and in law in deleting the addition of Rs.l,32,77,073/- made u/s.36(I)(iii) of .the I.T. Act, 1961 without properly appreciating the factual and legal matrix as clearly brought out by the Assessing Officer in his assessment order. 2. Rival conte....
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....argument, taken by the appellant is the investments were made in subsidiary company which is 100% subsidiary of the appellant and out of total investment of 610.56 crores, investment to the tune of Rs. 598 crores was made in these subsidiary company of the appellant named Dronagiri Infrastructure Pvt. Ltd. As per appellant, the investments being totally for the purpose of business, the ratio of decision in the case of Interglobe Enterprises Ltd. v. DCIT(Del.)(Trib.) has relied upon them is applicable. Along with the decision given by the Hon'ble Mumbai Tribunal in the case of Garware Wall Ropes Ltd. has been relied upon by the appellant. 3.4 I 'have gone through both of these cases and I am bound by the decisions given by the Hon....
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....wance u/s.14A can be made where there is no exempt income earned by the assessee in the relevant assessment year. 7. We had carefully gone through the decision of the Delhi High Court wherein the Hon'ble High Court held as under:- The expression "does not form part of the total income" in Section 14A of the Income Tax Act, 1961 envisages that there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year. Held, that no exempted income was earned by the assessee in the re....
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....plete the formalities. For the same, the assessee paid Rs. 2.90 crores to M/s. Urban Transport Infrastructure Pvt. Ltd. also. However, due to certain unavoidable circumstances, the intermediary company UTIPL could not fulfill requirements and hence paid back compensation of Rs. 8. 70crores to the appellant company against the deposit taken at Rs. 2.90 crores. The assessee has credited the same as revenue in their books of accounts, and the same has been claimed against interest expenses of 12,39,80,822/-. The AO concluded that the difference between income generated and interest paid is not allowable and hence disallowed the difference between Rs. 12,39,80,822 less Rs. 8,70,00,000/- totaling to Rs. 3,69,80,822/-. The appellant on the other ....
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....n these given facts where there is no dispute that the interest were paid on the funds which were utilised for business purpose only, irrespective of the fact that the same could not reach to its desired and, thus resulting into compensation, the expenses have to be allowed u/s.36(1)(ii) of the Act and hence are allowed. 11. We have considered rival contentions and found that AO has disallowed part of the interest expenditure on the plea that compensation received from Urban Transport Infrastructure Pvt. Ltd., was less, accordingly, difference between the interest expenditure and compensation so received was disallowed. The CIT(A) has deleted the disallowance by recording a finding of fact that amount was borrowed for the purpose of busin....
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....Tax Act, 1961. While explaining the meaning of this phrase the Hon'bIe Supreme Court in the case of S. A. Builders Ltd., vs. CIT(A), Chandigard reported in 288 ITR 1 has used the word "commercial expediency". By using this phrase Hon'ble Supreme Court has given a new dimension and clarified the concept further. In the judgment, the Supreme Court has defined commercial expediency' as "an expression of wide import and' includes such expenditure 'as a prudent ' businessman incurs' for the purpose of business. The expenditure may not have been incurred under any legal obligation, but yet it is allowable as a business expenditure, if it was incurred on' grounds of commercial expediency". Further, following this ju....