TaxTMI 
TaxTMI 
2016 (6) TMI 1262
X X X X Extracts X X X X
X X X X Extracts X X X X
....d its investment in the Shares and the ld. CIT(A) has erred in sustaining the same. 2. That the ld AO has erred in law as well as on the facts and circumstances of the case in not following order of Hon'ble Bombay High Court as given in the case of Reliance Utilities & Power Ltd 313 ITR 340 , which is an authority on the subject and thus is binding as submitted during the course of hearing and the ld. CIT (A) has erred in sustaining the same. 3. That the ld AO has erred in law as well as on the facts and circumstances of the case is disallowing the interest u/s 14A read with section rule 8D of the I.Tax Act or in other words not allowing the disallowed interest and ld CIT(A) has erred in sustaining the same." 2. In this case, original assessment was completed by the Assessing Officer U/s 143(3) of the Income Tax Act, 1961 (in short the Act) at Rs. 2,01,16,644/- which was revised after giving effect of order of the Hon'ble ITAT dated 23/9/2011 at Rs. 1,43,31,510/-. The ld Assessing Officer observed that the Hon'ble ITAT, Jaipur Bench in ITA No. 952/JP/2010 and 902/JP/2010 had directed the Assessing Officer to establish the nexus between the borrowed fund and investment ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee. Under these circumstances, it cannot be ascertained that the interest free fund were available to the assessee for investment in shares. Hence, interest on unsecured loan had been rightly disallowed by the Assessing Officer on proportionate basis as per provisions of Section 14A read with Section 8D of the Act for the investment in shares, which derived exempted income, but no disallowance has been made in the computation of assessment order by the Assessing Officer in order dated 30/3/2013. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had also confirmed the order of the ld Assessing Officer by observing that after perusing the original assessment order dated 30/12/2008 as well as submissions made by the assessee, the total addition was made by the Assessing Officer at Rs. 11,26,190/- U/s 14A of the Act on the ground that borrowed fund had been used for making investment, therefore, proportionate expenses had to be allocated against the income earned on such investment. The ld Assessing Officer had considered for this purpose the investment of Rs. 64,65,000/- made in building at Hanuman Nagar, Jaipur a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 order dated 22nd January, 2014/105 DTR (Ker) 299 (2014), therefore, he upheld the addition of Rs. 2,53,417/- U/s 14A of the Act. 4. Now the assessee is in appeal before us. All the three grounds of appeal are against the disallowances made U/s 14A of the Act. The ld AR of the assessee has submitted that the assessee has shown investment of Rs. 18,77,160/- in shares in its Balance Sheet for the year ended 31.03.2006, which was made in earlier years from A.Y. 1992-93 to 2001- 02. In the original assessment the ld Assessing Officer made disallowed of Rs. 2,53,416/-. In appeal it was directed by the ld CIT(A) to the ld Assessing Officer that brought clarity regarding the income earned and expenditure made for earning such income. The Hon'ble ITAT also considered this issue vide order dated 23.09.2011 in ITA No. 902 and 952/JP/10. After considering various decisions on this issue, it set aside to the Assessing Officer to establish the nexus between borrowed fund and investment in shares and will accordingly disallow the interest. The assessee submitted before the Assessing Officer that there is no nexus between the borrowed funds and interest free investment The assessee has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see had provided sufficient material on record to prove that no borrowed fund is utilized in making investment in shares. The requirement of the Assessing Officer to furnish the details of investment in shares and availability of cash on the date of investment in shares is neither as per the direction of the Hon'ble ITAT nor it is possible to provide such information considering the fact that the investments in shares were made between A.Y. 1992-93 to A.Y. 2001-02 and even Rule 6F(5) of the Income Tax Rules, 1962 (in short the Rules) requires the assessee to keep and maintain the books of accounts for a period of 6 years from the end of the relevant assessment year. The ld AO has not brought any material to prove otherwise as has been directed by Hon'ble ITAT, therefore, he prayed to delete the addition. He further placed reliance on the following case laws:- (i) CIT Vs. Taikisha Engineering India Ltd. (2015) 370 ITR 338 (Del.) (HC) (ii) CIT Vs. HDFC Bank Ltd. (2014) 366 ITR 0505 (Bom.) (HC) (iii) CIT Vs. UTI Bank Ltd. (2013) 215 Taxman 8 (Guj.) (HC) (Magz.) (iv) CIT Vs. Suzlon Energy Ltd. (2013) 354 ITR 630 (Guj.) (HC) (v) CIT Vs. Reliance Utilities & Power Ltd. 313....