TaxTMI 
TaxTMI 
2020 (4) TMI 94
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....unds and not out of the borrowed funds." 3. In ITA No. 2105/Del/2017, following grounds have been raised by the assessee: "1. The ld. CIT (Appeals) of Income Tax erred in disallowing the interest payment of Rs. 69,73,346/- keeping in view the interest free advances given by the appellant company. Full arguments will be advanced at the time of hearing. 2. The ld. CIT (Appeals) of Income Tax erred in ignoring the fact that the appellant had advanced the loans and advances from its own funds and not out of the borrowed funds." 4. In ITA No. 2106/Del/2017, following grounds have been raised by the assessee: "1. The ld. CIT (Appeals) of Income Tax erred in disallowing the interest payment of Rs. 68,81,215/- keeping in view the interest free advances given by the appellant company. Full arguments will be advanced at the time of hearing. 2. The ld. CIT (Appeals) of Income Tax erred in ignoring the fact that the appellant had advanced the loans and advances from its own funds and not out of the borrowed funds." 5. In ITA No. 2107/Del/2017, following grounds have been raised by the assessee: "1. The ld. CIT (Appeals) of Income Tax erred ....
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....med by the assessee was made by the Assessing Officer of Rs. 16,31,794/-. 9. It was argued before the revenue authorities that the Assessing Officer has made a notional computation of interest @ 15% on loans and advances of Rs. 268.74 crores. It was argued that there can be no notional addition of interest on interest free loan and advances has been decided by the Hon'ble Delhi High Court in the case of Shivnandan Buildcon Pvt. Ltd. v CIT 2015 (5) TMI 192. The ld. CIT (A) confirmed the addition holding that the burden lies on the assessee that interest free loans and advances were given from own funds and no nexus has been proved. 10. Before us during the argument, the ld. AR submitted that the details of the own funds available with the assessee. The ld. DR supported the order of the ld. CIT (A). The details of own funds and loans given are as under: Details of Interest Free reserves available with the appellant 11. We find that the loans and advances including interest free advances are far less than the own funds. And hence, the presumption that the own funds have been utilized for extending the loans and advances sets in. When the assessee has got own funds avai....
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....see during the AY 2013-14 had earned tax free dividend of Rs. 33,34,17,195/- on the various investments made by it in the equity shares and units. During the year, the assessee had net loss on account of sale of long term equity shares on which no STT is paid of Rs. 2,03,21,156/-. This loss is allowed to be carried forward as long term capital gains on which no STT is paid is taxable. Whereas, there was gain on sale of long term shares of Rs. 21,18,743/-, on which loss is not allowed to be carried forward. Besides, the assessee had taken a position that any investment in equity shares over a period of less than one year shall be taken as income from business and hence will be taxed at full rate of 30%. The ld. CIT (A) after due deliberation held that as per Rule 8D(2)(iii), the disallowance of Rs. 44,90,230/- is justified. 15. Before us, the ld. AR argued that the disallowance u/s 14A should only with respect to actual expenditure and such expenses should be directly corelated with the exempt income. The only dispute of this ground is 0.5% has applied on the average investments. The ld. AR argued that earning dividends is not an assured activity, no business man will ever incur ....
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....decision is Of the Allahabad High Court in Income Tax Appeal No. 88 of 2014, Commissioner of Income Tax (Ii) Kanpur, vs. MIs. Shivam Motors (P) Ltd. decided on 05.05.2014. In the said decision it has been held:- "As regards the second question, Section 14A of the Act provides that for the purposes of computing the total income under the Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. Hence, what Section 14A provides is that if there is any income which does not form part of the income under the Act, the expenditure which is incurred for earning the income is not an allowable deduction. For the year in question, the finding of fact is that the assessee had not earned any tax free income. Hence, in the absence of any tax free income, the corresponding expenditure could not be worked out for disallowance.............." The Courts further held that the income exempt under Section 10 in a particular assessment year, may not have been exempt earlier and can become taxable in future years. Further, whether Income earned in a subseq....
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.... 2,230,416,670 2,563,334,206 2,550,497,117 2,687,485,465 Document 2 Particulars Long Term Investment IN BONDS 6.70% Indian Railways Finance Corporation Ltd. Tax Rs.I Lac Each 8.20% Power Finance Corporation Bond National Highway Authority of India 8.20% 10 years 8% India Railway Finance Corporation Ltd. Tax Free Each 7.93% Rural Electrification Corporation Ltd.Tax Free Rs.1000/- Each IN EQUITY SHARES IL&FS Demat-no.10033578 QUOTED AND FULLY PAID UP Quantity As at 31.3.13 Quantity As at 31.3.12 Dividend Income 8,544 7.417 1,000 100,000,0 8,544,000 7.417.000 1,000 100,000,000 8,544 8,544,000 7.417 7.417.000 63,244,37 146,366,7 325,572,1 115,961,000 Asian Hotels (East) Ltd. of Rs.10/- each 54,000 18,486,41 Asian Hotels (North) Ltd. of Rs. 10/- each 109,975 34,440,71 Asian Hotels (West) Ltd. of Rs.10/- each 71.608 22.215.77 Balrampur Chini Mills Limited Crompton Graves Cairn India Ltd. Dabur India Ltd of Rs.1/- each Deccan Chroncile East India Hotel of Rs.2/- each Future Capital Holding Fresenius Kabi Oncology GVK Power & Infrastructure HD....
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....270,758 Dhampur Sugar 114,261 3,612,601 114,261 3,612,601 DLF Ltd 1,000 271,523 Eldeco Housing Financing Ltd. 14,843 2,991,497 1,000 11,832 271,523 2,388,240 142,826 2,000 GVK Power & Infrastructure 174,600 2,827,561 174,600 2,827,561 Hindustan Construction Co. Ltd. 42,500 1,566,024 42,500 1,566,024 Hindustan Petrolium Ltd. of Rs.10/- each IDBI Bank Ltd. 3,500 1,227,767 3,500 1,227,767 29,750 5,500 712,933 5,500 712,933 8,250 IL & FS Investmart Ltd. of Rs.2/-each 42,845 645,021 42,845 645,021 64,268 VIC ENTERPRISES PRIVATE LIMITED India Overseas Bank 1,500 187,547 1,500 187,547 6,750 Indian Oil Corporation Ltd. of Rs.10/-each Indorama Synthetic Ltd. 4,070 1,011,515 4,070 1,011,515 20,350 84,001 4,482,650 66,501 4,106,190 J.P. Hydro 27,000 1,049,364 27.000 1,049,364 J.P. Infratech Ltd. Mahindra Forgeing Ltd. of Rs. 10/-each 386 Manglore Chemical & Fertilizers Ltd. of Rs.10/- each 611,601 85,280 18,117,649 386 574,101 85,280 MIRC Electronics Ltd. of R....
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....Exports Limited of Rs. 10/- each 55,000 550,000 55,000 Sonakashi Market Pvt. Ltd.of Rs.10/- each 10% NCD MG Burman Capital Advisors Pvt.Ltd.10/- each Less :- Provision for Dimunition in Value of Investment 10,500 9,000,000 2,100,000 10,500 90,000,000 9,000,000 -5,201,300 166,485,780 Investment in PMS Kaizen Trust_domestic Scheme-1 Other Investment in Movable Properties:- JEWELLERY * Painting Artifacts of Ruby Stone Total in VIC ENTERPRISES PRIVATE LIMITED 4,500,000 4,500,000 1,355,129 22,140,500 3,175,000 1,107,939,475 550,000 2,100,000 90,000,000 -5,201,300 166,385,780 3,000,000 3,000,000 1,355,129 22,140,500 3,175,000 921,493,895 320,060,154 Details of Non Current Investment from which no exempt income has been earned in AY 2013-14 Total Investments other than Jwellery, Painting, Artifact & NCD Less: Investment from which no dividend received during the year As at 31.3.2011 991,268,846 As at 31.3.2010 804,823,266 6.70% Indian Railways Finance Corporation Ltd. Tax Free Bond of Rs. 1 Lac Each 8.20% Power Finance Corporation Bond 100,000,....