2021 (5) TMI 717

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....in its appeal however, the cruxes of the issue are that:- 1. The ld. AO has erred by disallowing the notional expenditure of Rs. 57,26,865/- invoking the provisions of section 14A of the Act. 2. The Ld. CIT (A) has erred by treating the appeal of the assessee to be infructuous as the assessee has filed appeal against the assessment order u/s. 154 of the Act dated 6/3/2017 in respect of addition made towards the book profit U/s. 115JB of the Act invoking section 14A of the Act. 3. The brief facts of the case are that the assessee is a Private Limited Company engaged in the business of manufacturing engineering goods filed its return of income on 1/10/2013 declaring NIL income as per normal provisions of the Act and Rs. 2....

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....re was no expenses involved for making such investment. It was therefore pleaded that the addition made for Rs. 57,26,865/- may be deleted. The ld. DR on the other hand argued in support of the order of the ld. AO however, admitted that the Ld. CIT (A) had abstained from addressing the issue raised in the appeal erroneously by treating the appeal to be infructuous. 5. We have heard the rival submissions and carefully perused the material available on record. With respect to the arguments advanced by the ld. AR dismissing the appeal of the assessee by the ld. CIT (A) by treating the appeal to be infructuous, we find merit in the same. The issue in the appeal against the order U/s. 154 of the Act was with respect to invoking the provisions....

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....can be incurred by an entity which will be attributable towards investments made in equity shares of other companies. In the case of the assessee, the assessee has invested in its own subsidiary companies out of its non-interest-bearing funds such as own share capital and reserves and this is not in dispute. Since in the case of the assessee the assessee company has utilised only its non-interest-bearing funds for making investment in its own subsidiary company, no interest cost can be attributable to the same because, there is no interest cost to the assessee, as it can be treated that the assessee has withdrawn from its capital and reserves which are assessee's interest free funds for making such investment. Further, for making investment....