TaxTMI 
TaxTMI 
2022 (1) TMI 1095
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....ax Act, 1961 (hereinafter the 'Act'). 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the AO in disallowing expenses relatable to exempt income by invoking the provisions of section 14A of the Act read with Rule 8D(2)(ii) & (iii) of the Income Tax Rules, 1962 (hereinafter the 'Rules'). For this, assessee has raised various grounds, which need not be reproduced. 3. Brief facts are that the assessee is the holding company of 'Rane' group of companies and is engaged in the business of providing services to its group companies in the areas of management, information technology, business development and infrastructure. The AO while framing assessment u/s. 143(3)....
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....if the assessee has already disallowed some amount then the AO to modify the impugned disallowance. Aggrieved, the assessee came in second appeal before the Tribunal. 5. Before us, the ld. counsel for the assessee first of all took us through the dividend earned by assessee company and he filed the details which are as under:- Date Dividend received from Rs. In lakhs 01.08.2014 Kar Mobile Limited 22 27.05.2014 Rane Madras Limited 55 28.07.2014 Rane Brake Lining Limited 268 08.08.2014 Rame Madras Limited 325 24.07.2014 Rane TRW Steering System - Final Dividend 218 02.02.2015 Rane TRW Steering System - Interim Dividend 437 Dividend from sister concerns 1,326 Dividend from Mutual Funds 62 The ld. coun....
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....Surplus and once these interest free funds are available with the assessee, the issue is squarely covered by the decision of Hon'ble Bombay High Court in the case of CIT vs. HDFC Bank Ltd, 366 ITR 505, wherein it was held that it would have to be presumed that the investment made by assessee would be out of the interest free funds available with the assessee. According to ld. counsel, this issue is covered by the decision of HDFC Bank Ltd., supra. 5.2. As regards disallowance under Rule 8D(iii) regarding administrative expenses, ld. counsel for the assessee drew our attention to the order of AO that the AO has not recorded any satisfaction as is envisaged under Rule 8D(2) that before resorting to disallowance of expenses relatable to e....
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....arned dividend income and claimed the same as exempt out of investments made in equity instruments. Admitted facts are that the assessee has more interest free funds available with it in the shape of Share Capital and Reserves and Surplus, which are to the tune of Rs. 283.06 crores as against the investments of Rs. 234 crores. We noted from the assessment order that the AO has recorded the finding that the assessee has not incurred any expenditure in relation to income which does not form part of total income and this finding is totally absurd whereas the assessee has incurred expenditure of Rs. 11,85,570/-. As regards interest expenses, once the AO is unable to prove the nexus of expenditure with the investment made in instruments giving r....