TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1611
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.....2017, wherein, the Tribunal has discussed the issue and confirmed the action of the CIT(A) in deleting the disallowance made by the Assessing Officer, by observing as under: " 3. Brief facts of the case are that the assessee is carrying on business of mining, processing and manufacturing of sponge iron. The Assessing Officer found that the assessee has shown investment in financial assets of shares and mutual funds and earning dividend income. Further, the assessee has on its own disallowed Rs. 8,57,512/- as expenses u/s.14A of the Act for earning exempt income. The assesse has produced a chart indicating that the disallowance has been computed on prorata basis taking into the income which was exempt. The Assessing Officer perused the computation prepared by the assessee and opined that in the case of the assessee, Rule 8D of the I.T.Rules will be applicable and observed that the disallowance u/s.14A made by the assessee is on lower side and calculated the disallowance u/s.14A r.w.s Rule 8D at Rs. 14,34,60,722/- and added the same to the total income of the assessee and passed order u/s.143(3) of the Act on 29.3.2013. 4. Aggrieved, the assessee has filed appeal with the CIT(A)....
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....compute the same where assessee itself shows no disallowance of expenditure under this head. In the present case it is to be found out whether both the tests are genuinely and ally applied by the AO. The appellant had disallowed an amount of Rs. 8,75,512/- on account therefore Section 1.4A(3) does not apply to its case. The only applicability is ion 14A[2) of the Act. In the body of the order the AO had stated that the assessee had mitted the computation of disallowance of expenditure made by it in relation to income which does not form part of the taxable income. Observing the same the AO had stated that e details of the computation have been seen and it is pertinent to mention here that in case of the assessee Rule 8D of the l.T.Rules will be applicable for the year under consideration since the earlier method for computing the expenses relating to income which does not form part of the total income has been substituted with the method as provided under Rule 8D. Considering the fact that the self declared disallowance U/S.14A is n the lower side and is not in conformity with the law the same is being recomputed in the manner as provided under Rule 8D." From the above observat....
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....ed for specific purposes and the interest on these term loans are clearly attributed to their respective purposes. The company has made investments in shares and mutual funds out of its surplus i.e. internal accrual of the company and reinvestment of dividends and other income arising out of these investments. The appellant has produced a statement showing the reserve and surplus to cover the investments. The appellant also submitted-that from the cash flow statement for the FY 2009-10 it is evident that the opening cash and cash equivalent amounted to Rs. 208,27,74,318.73 whereas investment amounting to Rs. 97,42,32,545.28 has been made during the year out of the cash inflows from the operating profit of the appellant and the funds accumulated from previous years. The appellant further pointed out that in the impugned year no further borrowings has been availed which proves that it had invested in shares and mutual funds out of its own funds and not from the borrowed funds. The Learned CIT(A), Cuttack while deciding the appeal in the case of M/s.Banspani Iron>Ore Ltd. for the AY 2008-09 in ITA No.0180/2010-11 had taken the similar view as that of the assessee that as the assesse....
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....ions, perused the orders of lower authorities, judicial decisions and materials on record. We find an identical issue had come up for consideration before the Tribunal in assessee's own case for A.Y. 2008-09. The Tribunal vide ITA No.008/CTK/2012 order dated 14.3.2012 following various judicial decisions has allowed the ground raised by the assessee . On perusal of statement of accounts, we find that value of investments as on 31.3.2010 is less than opening balance on 1.4.2009 and as explained there are no fresh investment further. The Ld.CIT(A) while deciding the issue in favour of the assessee has followed the decision of the Tribunal in assessee's own case as well as various judicial decisions, therefore, in absence of any contrary material brought to our notice against the decision of the Tribunal in assessee's own case, we do not find any infirmity in the order of the CIT(A) allowing the claim of of the assessee. Accordingly, we uphold the order of the CIT(A) and the grounds raised by the Revenue are dismissed." 6. Therefore, following the precedent, we dismiss the grounds of appeal of the revenue. 7. In Ground No.3 of the appeal, the grievance of the revenue is that the CIT....
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....Ore Beneficiation Plant as on 31.3.2011. The corresponding interest on the said term loans amounting to Rs. 6,72,96,690/- does not include the corresponding interest amounting to Rs. 10,63,560/- pertaining to term loan for CPP and interest amounting to Rs. 50,23,11,2(89/- pertaining to term loan for Ore Beneficiation Plant. In this connection, the details of Interest & Finance Charges amounting to Rs. 6,72,96,690/- and details of interest capitalized are submitted herewith for your Honour's kind perusal. As the said interests on term loan availed for CPP and Ore Beneficiation Plant are capital in nature, these are not claimed as revenue expenses in the P & L A/c. The Learned Assessing Officer has not gone through the detailed break up of interest debited to P & L A/c. and has presumed that the interest relating to capital work in progress had been charged to P & L A/c. of the Company. Therefore, the addition of proportionate interest amounting to Rs. 2,30,76,352/- corresponding to the work in progress was not based on facts and is therefore arbitrary and unjustified." 10. The CIT(A) after considering the submissions of the assessee held as under: " 1 have carefully perused....