TaxTMI 
TaxTMI 
2021 (6) TMI 174
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....f by this common order for the sake of convenience. 2. Before dealing with the issues on merit, it is pertinent to mention here that these are recalled matters. The appeals of the Revenue were dismissed on account of low tax effect. The Revenue had filed Misc. Applications for recall of the order of the Tribunal in ITA Nos.156/Ahd/2018 and 125 others dated 31.7.2018 qua the above assessee, because case of the Revenue falls within exception provided in clause 10(c) of the CBDT Circular No.3 of 2018. After hearing the MA, the Tribunal recalled the order dated 31.7.2018 qua the above assessee, and directed to list the appeals for adjudication on merit. Accordingly, the above appeals came up for hearing before us for adjudication on merit....
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....ngs to Jayesh Steel group. The search operation U/s 132 of the act was came out on 13.10.2011. The appellant was covered in search action and notice U/s 153A was issued. 2. The appellant had filed return of income on 18.03.2013 declaring total income of Rs. 107599/-U/s. 153A of the Act. Appellant has declared Rs. 755910 as income u/s 115JB of the act. Assessment was completed u/s 153A rws 143(3) of the act. Later on case was reopened u/s 147 of the act While finalizing the assessment u/s 143(3) rws 147, the assessing officer has made addition of Rs. 24,03,566/- U/s 14A of the Act The disallowance is worked out as per rule 8D of Income Tax Rules. 3. Assessing Officer has erred in making the assessment u/s 147 of the act Ass....
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....no disallowance should be made u/s 14A of the act. 6. The appellant respectfully submits that provisions of Sec. 14A of the Act are not applicable at all. The appellant has not incurred any expenditure for earning exempt income and therefore disallowance cannot be made U/s. 14A of the Act. 7. The appellant further submits that the ^provisions of Sec. 14-A of the Act cannot be applied summarily. Officer has to record finding that some expenditure is incurred to earn exempt income and therefore only provisions of Sec.l4A of the Act cannot be applied. The appellant relies on ITAT judgment of Mumbai in the case of Gravis Hospitality Ltd. vs. DCIT reported in [2015] 53 Toxmann.com 63. 8. The appellant also begs to invi....
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....and the submissions made by the appellant. It is seen from the same that the appellant has furnished a detailed chart in respect of its funds, investments, interest earned and interest expenses claimed. It is seen that though the appellant has claimed interest expenses of Rs. 53,97,991/-, it also has an interest income of Rs. 66,92,823/-. Thus, the appellant has a surplus of interest income to the extent of Rs. 12,94,832/-. In the case of ITO v. Karnavati Petrochem Pvt. Ltd., the Hon.ITAT, Ahmedabad has held that when the interest income was more than interest expense and the assessee was having net positive interest income, the interest expenditure could not be considered for disallowance u/s 14A and Rule 8D. Various other courts and tribu....
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....14A of the Act and Rule 8D, which deserves to be confirmed and order of the ld.CIT(A) be set aside. 7. On the other hand, the assessee has filed written submissions. The assessee supported orders of the ld.CIT(A) so far as disallowance of interest expenditure. Assessee relied on the proposition that when there is net interest income, then no disallowance can take place under Rule 8D, as held in Nirma Credit & Capital Ltd., 300 CTR 286, and that it is the difference between the interest paid and the interest earned which should be considered as assessee's interest expenditure for working out formula prescribed under rule 8D. In other words, for computation of disallowance under Rule 8D, not the gross interest payment, but the net inter....