2021 (6) TMI 1063

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.... This appeal filed by the revenue and the cross objection filed by the assessee are directed against the order dated 27.4.2017 passed by Ld. CIT(A)-11, Bengaluru and they relate to the assessment year 2009-10. The issues urged in these appeals relate to disallowance made u/s 14A of the Income-tax Act,1961 ['the Act' for short]. 2. The facts relating to the issue are stated in brief. The assessee is engaged in the business of property development. During the year under consideration, the assessee received share income from partnership firm and dividend from mutual funds aggregating to Rs. 2,64,40,765/-. The assessee claimed the above said amount as exempt. However, the assessee did not make any disallowance u/s 14A of the Act. It ....

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....nvest India Ltd. (2020) 121 Taxmann.com 233. We have gone through the said decision and the same relate to a case where no dividend income was received. In this case, the assessee has earned dividend inome and hence, in our view the said decision is not applicable to the facts of the present case. 5. We notice that the own funds available with the assessee was Rs. 355.57 crores while the value of investment in partnership firm mutual funds and shares aggregated to Rs. 251.82 crores. In view of the decision rendered by Hon'ble Karnataka High Court in the case of CIT Vs. Micro Labs Ltd. (2016) 383 ITR 490, no disallowance out of interest expenditure is called for. For the sake of convenience, we extract below the observations made by Hon'ble....

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....bunal has followed a decision of the Bombay High Court in the case of CIT v. HDFC Bank Ltd. [2014] 366 ITR 505/226 Taxman 132 (Mag.)/49 taxmann.com 335. When the issue is already covered by a decision of the High Court of Bombay with which we concur, we do not find any substantial question of law would arise for consideration as canvassed." Accordingly, we confirm the deletion of disallowance of interest expenses of 8D(2)(ii) of IT Rules 6. The next issue relates to disallowance out of expenditure under rule 8D(2)(iii). We notice that the Ld. CIT(A) has deleted the disallowance by accepting the submissions of the assessee that the assessee has cross charged a sum of Rs. 1.19 crores out of operating and other expenses to the respective pa....