AI Drafter 
TaxTMI 
TaxTMI 
2018 (7) TMI 582
X X X X Extracts X X X X
X X X X Extracts X X X X
.... passed by learned Assessing Officer (hereinafter called "the AO") u/s 143(3) of the Income-tax Act, 1961 (hereinafter called "the Act") for AY 2011-12. 2. The grounds of appeal raised by Revenue in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under:- 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the disallowance made of Rs. 33,20,476/- made by the A.O. u/s 14A r.w. rule 8D(ii) of the I.T. Act, 1961 2. The order of the CIT(A) may be vacated and that of the Assessing Officer may be restored. 3. The assessee craves leave to add, amend, alter or delete any ground of appeal. 3. The b....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a disallowance of Rs. 32,20,476/- is made which is computed as the formula suggested in rule 8D sub-clause 2(ii) i.e. AxB/C. Here A is Rs. 44,11,84,882/- as mentioned in (1) above. Similarly, B is Rs. 9,87,13,571/- and C is Rs. 13,11, 58,72,103/- as mentioned in (2} & (3) above respectively. The calculation is as given below. 441 184882/-x 9,87,13.571/ 13,11, 58,72,103= Rs. 32,20,476/-. 5.5 Further a disallowance of Rs. 4,93,568/- is made one half percent of the overage value of investment which is resulting into payment of dividend to the Assessee Company as per sub clause 2(iii)of the rule 8D. The assessee had contended before the AO that it has its own funds which were more than the investment made in the securities....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellant's submissions, the observations of the AO in the assessment and the facts of the case. I have also gone through the decisions relied upon by the appellant. As far as the interest expenditure on borrowed loans is concerned, it is seen that the appellant has made investments in equity shares in the earlier years and has shown availability of funds from internal accruals to cover the investment in equity shares as can be seen from the above table reproduced in the appellant's submissions. Therefore clause (i) &(ii) of Rule 8D of the I.T. Rules were not applicable in the appellant's case. However, certain administrative expenditure is required for making and maintaining investment in equity shares. The decision making personal of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red the contentions of learned DR and perused the material on record . The assessee filed return of income showing current loss of Rs. 68,93,36,051/- which loss was revised by the assessee by filing revised return of income on 19.10.2011 showing current loss of Rs. 68,53,14,666/- for the impugned assessment year. The assessee is engaged in the business of manufacturing of transformers, electronic energy meters and turn key projects. The assessee received dividend income Rs. 3,92,298/- which was claimed as an exempt income u/s. 10(34) of the Act. The whole controversy in this appeal before the tribunal revolves around disallowance u/s. 14A r.w.r 8D(2)(ii) of the 1962 Rules wherein Rule 8D(2)(ii) of the 1962 Rules was invoked by the AO to dis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....umption will be that assessee has invested its own funds in investment capable of yielding exempt income unless said presumption is rebutted with cogent evidences. The reliance is placed on decision of Hon‟ble Bombay High Court in the case of CIT v. Reliance Utilities and Power Ltd. (2009) 313 ITR 340(Bom. HC) as well as decision of Hon‟ble Bombay High Court in the case of HDFC Bank Ltd. v. DCIT reported in (2016) 383 ITR 529(Bom) . Thus under these circumstances , we are of the considered view that no disallowance u/s. 14A r.w.r. 8D2(ii) can be made of the interest expenditure as is contemplated by the AO. However the facts available on records does not reflect the availability of own funds as at the beginning of the previous y....