TaxTMI 
TaxTMI 
2019 (5) TMI 102
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....r.w.s. 263 of the Income Tax Act 1961(In short the 'Act') dated 20.03.2014 framed by 2. Revenue has raised following grounds of appeal; 1. Whether on the facts and in the circumstances of the case, Ld.CIT(A) erred in deleting the addition of Rs. 2,23,40,745/- on account of disallowance ix]« 14A of the IT Act read with Rule 8D, ignoring the fact that correctness of claim of disallowance in return of income was not proved by the assessee. 2. Whether on the facts and in the circumstances of the case, Ld,CIT(A) has erred in deleting the addition of Rs. 2,23,40, 745/ - on account of disallowance si]« 14A of the IT Act read with Rule 8D, ignoring the fact that assessee failed to prove direct nexus between interest....
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....getting relief as the disallowance u/s 14A of the Act of Rs. 2,23,40,745/- was deleted by Ld. CIT(A). 4. Now revenue is in appeal before the Tribunal. 5. At the outset Ld. Counsel for the assessee submitted that the issue raised in this appeal is squarely covered by the decision of the Co- ordinate Bench in the case of M/s. Turquoise Investment & Finance Pvt. Ltd vide ITA No.332 & 333/Ind/2017 order dated 06.02.2019 wherein the case of one of the group concern has been dealt and the Hon'ble Tribunal has sustained the disallowance only towards administrative expenses at Rs. 7,50,000/-. 6. Ld. Departmental Representative supported the orders of Ld. A.O but could not controvert the fact that the issue is squarely covered by the decisi....
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....tments which is exempt u/s. 10(34) of the Act and it did not form part of total income. The appellant himself made the disallowance u/s 14A amounting to Rs.l 0, 17,78,678/- as under:- A.= Gross interest and finance charges = Rs. 13,90,34,745/- B= Interest income on inter-corporate loans granted= Rs. 3,72,56,740/- The disallowance on account of interest charges equal to A - B= Rs. 10,17,78.005/- The appellant has also considered the demat charges expenses at Rs. 673/-. Thereby making the total disallowance of Rs.l0,17,78,678/(Rs.1 0, 17,78,005/- + Rs. 673/-). The above action of the appellant of making disallowance of net interest has been upheld by following judicial authorities:- > Morg....
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.... net interest basis. (Para 2.2, Page 10 & 11). Assessment Year 2002-03 In this year, the CIT(A), Ujjain vide order u/s 250 dated 27.08.2009 and u IS 154 dated 10.02.2009 in appeal No. U-555/07 -08 made the disallowance of interest u./s 14A on a net basis i.e interest paid (-) interest received. (Para 5.3 & 5.4, Page 13 & 14) Assessment Year 2005-06 In this year, the CIT(A), Ujjain vide order dated 22.03.2010 in appeal No.U-398/08-09 made the disallowance of interest u/s 14A on a net basis i.e interest paid (-) interest received. (Para :.3. Page 3). In view of the above, the AO is not justified in applying Rule 8D and rejecting the claim of the Appellant without showing non-satisfaction is not as ....
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....ng consistent view as taken for A.Y. 2008-09 observe that for A.Y. 2011-12 against the administrative expenses of Rs. 8,51,156/-, assessee has contended that disallowance if any to be made for administrative expenses should be restricted to Rs. 7,22,648/-. We find that for A.Y. 2008-09 average investments fetching exempt income stood at Rs. 421.98 cr. which has grown to Rs. 803.40 cr. for A.Y. 2011-112. We, therefore, being fair to both the parties and taking consistent approach, are of the view that disallowance of Rs. 7,50,000/- shall be justified towards the disallowance of administrative expenses which may have been incurred for administrating the investments fetching exempt income. We accordingly order so and direct the assessing offic....