2021 (8) TMI 870

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....venue reads as under: "Whether on the facts & in the circumstances of the case, the Ld. CIT(A) has erred in directing the AO to allocate the expenditure on proportionate basis towards shares that have been sold off and shares that have been retained by the appellant, while computing the disallowance u/s 14A where as there is no such provision under rule 8D of the Income Tax Rules." 3. The cross objections of the assessee read as under: 1. "That the authorities below ought not to have considered: (1) Professional and consultancy charges to the extent of Rs. 12,245,875; (2) Audit fees of Rs. 50,000/-; (3) Interest on TDS of Rs. 10,64,258/-; and (4) Interest on loan to Indiabulls of Rs. ....

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.... Briefly stated, the facts of the case are that the assessee company's activity is to hold the shares of promoters of NDTV Group. It can be seen from record that the assessee company is a special purpose vehicle to create a corporate entity that holds the shares of NDTV Ltd. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has incurred finance charges in the form of interest, loan processing fees and other bank charges. The cumulative interest amounted to Rs. 68,28,78,089/-. The Assessing Officer noticed that the assessee company has disallowed certain interest payments on account of non-deduction of tax at source and, accordingly, returned loss of Rs. 49,01,73,918/-. 6. As the company....

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....on proportionate basis towards shares that have been sold off and shares that have been retained by the appellant. The proportionate expenses to the extent of retained shares are to be disallowed under section 14A. The Assessing Officer is directed to accordingly re-compute the disallowance under section 14A. The Assessing Officer's decision of taxing interest income at 10% is confirmed. The grounds of appeal are accordingly disposed off." 10. At the very outset, we are of the considered view that the ratio laid down by the Hon'ble High Court of Delhi in the case of Joint Investments [P] Ltd 59 Taxmann.com 295 squarely applies to the facts of the case and the same read as under: "The third, and in the opinion of this Court, ....