TaxTMI 
TaxTMI 
2019 (11) TMI 1333
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.... "1. The Commissioner of Income Tax (Appeals) (CIT), erred in confirming the addition of Rs. 30,54,794 made by invoking section 14A of the Income Tax Act (Act). Ground on Source of funds to make investments 2. The CIT has made an error when holding that the appellant had only Rs. 13,91,15,414 as available funds while the invest was to the tune of Rs. 24,00,58,742. 3. The amount of Rs. 13.91 crores was on 31.3.2008 while the investment during the financial year 2008 - 09 was Rs. 14.80 crores. The appellant had sold investments worth Rs. 9.2 crores during the year. 4. The CIT has not stated facts when observation that "the appellant has not been able to file a cash flow statement linking its availabl....
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.... i. CIT vs. Hero Cycles Ltd. (323 ITR 518) ii. CIT vs. Gujarat Industries Ltd. (218 Taxman 742); and iii. CIT vs. Kribhco (349 ITR 618) and iv. Reliance Utility and Power Ltd. (313 ITR 340) In the abovementioned cases, it has been held that it should be presumed that the assessee used own funds for making investments where assessee had both own funds as well as borrowed funds. The Id.CIT(A), on the same parity of reasoning, directed the AO to delete the addition of Rs. 75,67,905/- under ITA Nos.1429 & 1565/Bang/2014 rule 8D(2)(ii). Therefore, we do not find any reason to interfere with the order of the Id.CIT(A). Hence, the appeal filed by the revenue is dismissed. 8. The appellant also wishes to rely on th....
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....case of Maxopp Investment Ltd. Vs. CIT (347 ITR 272) it is not the purpose of the expenditure which is relevant. Once exempt income is earned, it means that some expenditure being incurred in relation to the exempt income which should be disallowed by applying formula laid down in rule 8D(2)(iii). Therefore, action of the AO is correct in applying rule 8D(2)(iii) but the amount of disallowance should be restricted to the dividend income. 13. The appellant submits that the disallowance cannot exceed the amount of exempted income. The appellant relies on the decision of the Delhi High Court in the case of DCM Ltd v DCIT. 14. The appellant also relies on the decision of the Bombay High Court in the case of CIT v Deli....
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....ts claim 20. The appellant further submits that the CIT ought to have appreciated the fact the assessing officer has not brought out any reason for rejecting the claim of the appellant and has mechanically applied the provisions of section 14A. 21. The appellant draws your attention to the decisions of the courts in the cases of DCIT v Ashish Jhunjhunwala Kolkatta and DCIT v Philips Carbon Black Ltd 133 ITD 189. 22. For these and other grounds that may be urged at the time of hearing, the appellant prays that the Honorable Bench of the Tribunal may kindly delete the disallowance made under section 14A of the Income Tax Act" 3. At the very outset, it was submitted by ld. AR of assessee that in the present year, ....