2021 (2) TMI 1166

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..... 14A of the Act r.w.r 8D of the Rules amounting to Rs. 8,82,13,511/-. 3. The brief facts of the case are that the assessee is a Limited Company engaged in the business of generating power filed its return of income on 28/9/2013 admitting loss of Rs. 42,86,27,875/-. Thereafter the appeal was taken up for scrutiny and assessment was completed U/s. 143(3) of the Act on 29/3/2016 wherein the Ld. AO invoked the provisions of section 14A of the Act r.w., Rule 8D of the Rules and disallowed an amount of Rs. 8,82,13,511/-. On appeal, the Ld. CIT (A) deleted the addition by observing as follows:- "VIII) Ground Nos.2 and 3 in appeal relates to applying the provisions of section 14A of the Act. Facts of the case, grounds of appeal, assessment orde....

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....7,57,480/- as on 31/3/2013 in its sister concerns out of its non-interest bearing funds such as its equity share capital and reserves. The Ld. AR further submitted that in this situation there is no scope for any expenditure to be incurred towards interest for making such investment. However, the Ld. AO erroneously invoked the provisions of section 14A of the Act r.w. Rule 8D of the Rules and determined the disallowance of expenditure at Rs. 8,82,13,511/-. The Ld. AR further argued that on appeal, the ld. CIT (A) deleted the addition by holding that since the assessee had made the entire investment out of its non-interest-bearing fund, no interest expenditure can be attributed for making the investment which is justifiable and appropriate. ....