TaxTMI 
TaxTMI 
2020 (11) TMI 260
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.... an appellate order for A.Y. 2014-15 on 01-07-2018. 2. The Ld. CIT(A) has erred in confirming the disallowance out of interest expenses of Rs. 6,59,425/-. 3. The Ld. CIT(A) has erred, not only in confirming the disallowance u/s. 14A of the I.T. Act, but has further erred in enhancing the disallowance to Rs. 14,36,931/-" 3. The fact in brief is that return of income declaring income of Rs. 12,02,23,628/- was filed on 9th Sep, 2014. The case was subject to scrutiny assessment and notice u/s. 143(2) was issued on 28th August, 2015. The assessment u/s. 143(3) was finalized on 26th June, 2016. The relevant facts of the case are discussed while adjudicating the grounds of appeal filed by the assessee as under:- Ground No. 1(Disallowance of ....
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.... is covered by the decision of Co-ordinate Bench of the ITAT in the case of the assessee itself for A.Y. 2009-10 vide ITA No. 1563/Ahd/2013 dated 16/12/2016. It is also contended that small amount of loan of Rs. 41.05 lacs was advanced out of substantial amount of interest free funds of Rs. 25.6 crore available with the assessee. On the other hand, the ld. Departmental Representative has supported the order of the lower authorities. 7. Heard both the sides and perused the material on record. It is undisputed facts that assessee was having substantial amount of interest free funds of Rs. 25.6 crore as against amount of loan advanced of Rs. 41.05 lacs. With the assistance of the Ld. representatives, we have gone through the decision of the C....
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....fe of Director of the assessee-company and was thus the advance extended was in the personal benefit of the Director without any traces of commercial expediency in such advance. He accordingly submitted that the reasons cited by the CIT(A) in sustaining the disallowance does not call for any interference. 8. We have carefully heard the rival submissions and perused the orders of authorities below. At the outset, we note that the interest free own funds available at the disposal of the assessee stands at. Rs. 352.91 lakhs as on 31/03/2008 and Rs. 507.94 lakhs as on 31/03/2009. The corresponding interest-free advance as on 31/03/2009 stands at Rs. 21.10 lakhs. In such a situation, where interest-free own funds available to the assessee are ....
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....ned that its investment in share/securities was to the amount of Rs. 3.07 crores whereas the assessee company had its own fund of Rs. 25.68 crores, therefore, no disallowance should be made. The Assessing Officer has not accepted the explanation of the assessee and computed the disallowance u/s. 14A r.w.r. 8D to the amount of Rs. 1,54,816/-. 9. The assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has enhanced the amount to the amount of disallowance to Rs. 14,36,931/-. The ld. CIT(A) was of the view that assessee has utilized overdraft to make investment in the shares, therefore, the interest amounting to Rs. 14,86,246/- was held as expenses exclusively laid out for earning exempt income after reducing the already offered su....