2012 (9) TMI 1191

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....1/- u/s.14A of the Act to the business loss determined in return filed u/s.139(A) of the Act of Rs. 48,599/. The addition of Rs. 97,82,691/- comprised of disallowance made out of interest amounting to Rs. 93,60,788/- and from other administrative expenses amounting to Rs. 4,21,903/-. 1.02 The Learned CIT(A) did not appreciate that no disallowance was warranted u/s. 14A of the Act as the appellant has also received taxable interest income of Rs. 95,43,091/-, which was already offered to tax. Direct nexus between taxable interest income and expenses having been proved, appellant prays that no disallowance u/s. 14A was warranted as the provision of he said Section 14A are triggered only if the appellant has earned tax free income agai....

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....ing the course of hearing. Since the assessee offered the interest under head 'income from other source', the ground is allowed to be withdrawn. Only ground no. 1 survives for consideration. 2. We have heard Ld. Counsel and Ld. DR and perused the paper book filed. 3. Briefly stated assessee is a member of Joint Venture - M/s. Ackruti SMC. It has invested in capital of Joint Venture. The break up of investment as on 31.03.2007 and 31.03.2008 is as under. Sr.No. Investments 31.03.2007 31.03.2008 1 Capital / current Account of Partnership Firm 82,654,353 86,106,854  To make investment in the JV, assessee has taken loans and is paying interest on the same. The interest income of Rs. 95,43,091 has been offer....

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....,091   96,14,797   Expenditure   Administrative Expenses 51,047 Interest & finance charges 99,77,398 Total 1,00,28,445 Profit & Loss Before Tax  (4,13,648)  6. The computation of income filed by assessee is as under : STATEMENT OF INCOME INCOME FORM BUSINESS:     Net Loss as Per Profit & Loss Account   (413,479) Add : Disallowable expenses      Filing Fees (Sub division share) 2448    Interest paid 9977398 9979846      9,566,367   Less:Disallowable Income      Share of profit from JV(FY:2006-07) 169    Share of ....