TaxTMI 
TaxTMI 
2021 (3) TMI 41
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....its return of income on 30.09.2013 declaring total income of Rs. 1,22,162,250/-. Thereafter assessee filed revised return of income on 22.09.2014 revising the total income to Rs. 1,68,46,110/-. The case was selected for scrutiny and thereafter assessment was framed under section 143(3) vide order dated 23.03.2016 and the total income was determined at Rs. 1,73,42,640/-. Aggrieved by the order of AO, assessee carried the matter before the CIT(A) who vide order dated in 30.10.2017 in Appeal No. 06/2016-17/GZB/Aligarh granted partial relief to the assessee. Aggrieved by the order of CIT(A), assessee is now before us and has raised the following grounds of appeals: "1. Because the assessment order is arbitrary, without enquiry surmisical, spe....
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....r pointing to the copy of Balance Sheet as on 31.03.2013 submitted that the interest free funds available with the assessee in the form of Share Capital are Rs. 21.04 crores (rounded off) and of Reserves and Surplus of Rs. 38.18 crores (rounded off) thus having interest free funds aggregating to Rs. 59.23 crores which are much more then the investment of Rs. 1.01 crore. He therefore submitted that in such a situation it is to be presumed that the investments are out of interest free funds and not borrowed funds and therefore no disallowance of interest under Rule 8D(2)(ii) is called for. He thereafter submitted that if at all any disallowance is to be made, it is to be restricted to the disallowance under Rule 8D(2)(iii) amounting to Rs. 50....
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.... of which is also stated to have been filed before AO), we find that the interest free funds of the assessee in the form of Share Capital and Reserves and Surplus as on 31.03.2013 are in the region of Rs. 59 crores as against the investments of around Rs. 1 crore meaning thereby that the interest free funds are more than the investments. On the issue of presumptions that when interest free funds available with the assessee are in excess of investments and then the investments are presumed to be out of interest free funds, we find that Hon'ble Bombay High Court in the case of HDFC vs. DCIT reported in (2016) 383 ITR 529 has observed as under: "15. It is clear that for the first time in the case of HDFC Bank Ltd. (Supra) that this Court....
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....ade out by the impugned order. Thus, impugned order has proceeded on a fundamentally erroneous basis as the ratio decidendi of the order in Godrej and Boyce manufacturing Co. Ltd. (Supra) had nothing to do with the rest of presumption canvassed by the petitioner before the Tribunal on the basis of the ratio of the decision of this Court in HDFC Bank Ltd. (Supra). 16. At the hearing Mr. Suresh Kumar, Learned Counsel for the Revenue urged that on the facts of this case no fault can be found with the order of the Tribunal. It is submitted that, the petitioner was not able to establish before the Assessing Officer and the CIT(A) that the amounts invested in the interest free securities came out of interest free funds available with the petit....