TaxTMI 
TaxTMI 
2021 (2) TMI 1138
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....4A r.w. Rule 8D(2) of the I.T. Rules in the facts and circumstances of the case. 3. The brief facts are that the assessee is a company engaged in the business of manufacturing of engineering and automobiles parts and also has wind mills in Maharashtra and Tamilnadu. The assessee filed return of income declaring a total income of Rs. 5,72,00,590/- and under scrutiny the AO determined the same at Rs. 5,73,01,284/- inter alia making addition u/s. 14A and disallowing interest expenses vide its order dated 31-12-2014 u/s. 143(3) of the Act. The CIT(A) deleted the addition made on account of interest expenses of Rs. 68,84,106/- and confirmed the addition made u/s. 14A r.w. Rule 8D. 4. After hearing both the parties, we note that the assesse....
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....e made investments during the year under consideration out of which Rs. 1,00,00,000/- invested in government bonds. It is needless to say that the investments made in government bonds yield no dividend but only interest. 5. It is a settled proposition that if the own funds are more than the investments made should be presumed that the assessee made investments from its own funds. As discussed above, the assessee made investments to the tune of Rs. 15.18 crores in the year under consideration, to which the Balance Sheet as on 31-03-2012 clearly shows as non-current investments, and also shows own funds at Rs. 32,38,52,976/- which is more than the investments made. Therefore, the interest expenses disallowed under Rule 8D(2)(ii) is not mai....
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....le High Court of Bombay in the case of Sesa Goa Limited (supra) was pleased to hold that the Education Cess is an allowable expenditure as per the provision of the I.T. Act. The relevant portion of the order of Tribunal in ITA No. 1578/PUN/2017 for A.Y. 2011- 12 in the case of M/s. Advik Hi-Tech Pvt. Ltd. is reproduced here-in-below for ready reference : "12. The assessee has also preferred additional ground which reads as follows: "The Ld. AO be directed to allow deduction of Rs. 12,91,464/- paid towards Education Cess under Finance Act while computing the taxable income under normal provision of the IT Act." 13. We find that this issue is squarely covered by the decision of the Hon'ble Bombay High Court in the c....
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....e Hon'ble Bombay High Court observing on the impugned order of the ITAT has reasoned at Para 33 of the said order that the Tribunal has observed that since "cess" is collected as a part of the income tax and fringe benefit tax, therefore, such "cess' is to be construed as "tax". However, the Hon'ble Bombay High Court held that there is no scope for such implications when construing a taxing statute. Even though, "cess" may be collected as a part of income tax, that does not render such "cess" either rate or tax, which cannot be deducted in terms of the provisions in Section 40(a)(ii) of the Act. The mode of collection is really not determinative in such matter. Therefore, it was held that amount "cess" paid is deductable from total income o....