2017 (9) TMI 108

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....eal is against the disallowance u/s 14A of the Income-tax Act, 1961 (hereinafter also called 'the Act'). 3. Briefly stated, the facts of the case are that the assessee made investments in SBI Magnum Insta Cash Fund Daily Dividend Option (hereinafter also called `the Fund') amounting to Rs. 100,01,081/-. There was no opening balance of such investments. The assessee earned exempt dividend income amounting to Rs. 13,54,176/- on such investment. The Assessing Officer, after recording satisfaction, computed disallowance amounting to Rs. 5,37,483 u/s 14A read with Rule 8D(2) in two parts, namely, clause (ii) towards interest of Rs. 4,87,478/- and under clause (iii) @ ½% of average investment of Rs. 50,005/-. The ld. CIT(A) observed tha....

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....st bearing funds are more than the investment in tax free securities no disallowance of interest expenditure u/s 14A can be made. This view has been taken by following the judgments of the Hon'ble Bombay High Court in CIT vs. HDFC Bank Ltd. (2014) 366 ITR 515 (Bom). It is further observed that this issue is no more res integra in view of the recent judgment delivered by the Hon'ble Supreme Court in Godrej & Boyce Manufacturing Company Ltd. vs. DCIT (2017) 394 ITR 449 (SC), in which it has been held that when interest free funds in the form of share capital and reserves are more than investment, then no disallowance of interest can be made u/s 14A. Respectfully following the ratio decidendi from the above judgments, we approve the ac....

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....his order was indicative and subject to revision based on material cost and cost incurred by the assessee. The assessee revised sale amount with adjustment of Rs. 327,65,554/-. This figure represented the adjustment finalized after the close of the year but relating to sales made during the year. The Assessing Officer did not accept the assessee's contention about the crystalization of the amount of sales. In his opinion, such price negotiation and adjustment took place after the close of the financial year and, hence, it was a tool employed by the assessee to reduce its tax liability. He, therefore, added a sum of Rs. 3.27 crore to the assessee's total income. The assessee submitted details before the ld. CIT(A), which have been captured o....

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....s issue are that the assessee claimed deduction towards interest (Prior period item) in the computation of income for the above referred two sums. The Assessing Officer did not allow the deduction. The ld. CIT(A) confirmed the addition by observing that the interest liability was in respect of payment of dues to HSIDC for plots of the Land purchased by the assessee for the purpose of setting up new plant at Bawal and hence capital in nature. The assessee is aggrieved against the sustenance of addition. 11. At the outset, the ld. AR candidly admitted that this interest disallowed by the Assessing Officer related to the lands purchased by the assessee for the purpose of setting up new plant at Bawal. Since the interest relates to the perio....