TaxTMI 
TaxTMI 
2016 (4) TMI 1370
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....ssessee is with respect to applicability of the provisions of section 14A of the Income Tax Act, 1961 (hereinafter the Act) to the facts of the present appeal and confirmation of disallowance to the extent of 5% of the exempted income. The crux of argument advanced by ld. Counsel for the assessee, Shri D.J. Shukla, is that the exempt income was to the extent of Rs. 50 lakhs and only one business investment was made by the assessee, wherein, no disallowance is called for. On the other hand, the ld. DR, Shri Rajesh Damor, defended the conclusion, arrived at in the impugned order. 2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is a public sector corporatio....
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....er was affirmed against which the assessee is in further appeal before this Tribunal. 2.3. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, we find that the necessary details was very much made available before the Assessing Officer/ Commissioner of Income Tax (Appeal). The investment was made out of own funds for the purposes of earning dividend. The availability of funds, details of capital share and reserve and surplus is even available at page-6 of the impugned order. So far as, applicability of rule-8D is concerned, so far as, assessmen....
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....ned order. The relief was denied to the assessee on the plea (para 5.5 of the impugned order) that the assessee could not produce the evidence with respect to these liabilities whether crystallize during the year. However, the assessee drew our attention to page 24 of the paper book with respect to rejections/refunds and we found the explanation of the assessee to be correct. Considering the facts and the explanation of the assessee, this ground is allowed. The appeal of the assessee, is, therefore, allowed. 4. Now, we shall take up the appeal of the Revenue (ITA No.4919/Mum/2011), wherein, first ground pertains to directing the Assessing Officer to treat the interest income of Rs. 3018.64 lakhs on short term deposits as business income a....
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....siness. However In the various case laws relied upon by the learned counsel for the assessee the deposits are being used in the course of business and are only deposited for short term periods or in current accounts and the source of funds are business receipts. In the present case, there is no dispute that the funds are sale proceedings in the business activities of the assessee company abroad. *It is also seen that instead of repatriating the funds to India, the assessee was permitted to utilize the funds for their day-to-day administration purposes as well as for repayment of various loans taken for "business purposes by retaining the funds abroad with the necessary permission from Reserve Bank of India. It is also a fact that these depo....