2014 (11) TMI 1174

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..... Thereafter a revised return of income was filed on 31.3.2010 declaring 'nil' income. The AO passed an order u/s 143(3) on 23.12.2011 determining the total income at Rs. 32,04,18,100/-, inter alia making disallowance of expenses u/s 14A, disallowance of prior period expenses and disallowance on account of foreign exchange, variations claimed as revenue expenses. 3. Aggrieved the assessee carried the matter in appeal before the First Appellate Authority which granted part relief. Aggrieved the Revenue has come up in appeal before us on the following grounds. "1. The Ld.CIT(A) has erred in law and on facts in ignoring the fact that though the investments were made through borrowed money in its subsidiary companies but the investments has ....

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....nds of appeal." 4. None appeared on behalf of the assessee despite issual of notice. There is no petition for adjournment either. Under the circumstances we dispose of the case ex parte on merits qua the assessee after hearing the Ld.D.R. 5. Heard Mr.Gunjan Prasad, the Ld.D.R. on behalf of the Revenue. 6. On a careful consideration of the facts and circumstances of the case, on perusal of orders of lower authorities, material on record and case laws cited, we hold as follows. 7. Ground nos. 1 and 2 are on the issue of disallowance u/s 14A. 7.1. The First Appellate Authority has noted that the AO has determined direct expenditure under Clause (i) of Sub-Rule (2) of Rule 8D at 'nil' income. As regards indirect interest expenditure under ....

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.... amount has crystallised during the year, as the assessee came to know about these expenses only in the F.Y. 2008-09. 7.4. The second limb of the argument of the assessee is that, which has been consistently following the policy of netting out prior period income with prior period expenses and the net effect was disclosed in the computation of income. It was also submitted that such a treatment was accepted by the Revenue for the AY 2007-08 and 2008-09. The First Appellate Authority has, on the principle of consistency, accepted the contentions of the assessee. We find no infirmity in the same. Thus ground no.3 and 4 are dismissed. 7.5. Ground no.5, 6 and 7 is related to disallowance of foreign exchange fluctuation loss. The assessee claim....