2017 (9) TMI 531

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....t of the Income Tax Appellate Tribunal dated 27.12.2016 raising following questions for our consideration: "A. Whether on the facts and circumstances of the case and in law, the Tribunal was justified in holding that "Authorities below were indeed in error in sustaining the impugned disallowance of Rs. 79.30lacs" without appreciating that the A.O. had correctly made addition of Rs. 79.30 lacs in....

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....ice that the assessee had in return filed for the relevant assessment year 2008-09 had made adhoc disallowance of Rs. 1 lakh towards administrative and other expenditure for earning exempt income. The Assessing Officer however, disallowed a sum of Rs. 79.30 lakhs under section 14A of the Act with the aid of rule 8D of the Rules. This principally included the interest expenditure of the assessee on....

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....g the principle, laid down by Hon'ble Bombay High Court in case of CIT v. Reliance Utilities & Power Ltd. (supra), which states that if there are interest free funds available to an assessee sufficient to meet its investments and at the same time the assessee has raised a loan it can be presumed that the investments were from interest free funds available, and, accordingly, no disallowance und....

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....he second question became academic in nature. However, we would like to make a few comments. The impugned judgment of the Tribunal seems to be suggesting that no disallowance under section 14A of the Act can be projected while computing a company's booked profit under section 115JB of the Act. These observations are based on the Tribunal's earlier judgment in case of DCIT Vs Sobha Develope....