TaxTMI 
TaxTMI 
2022 (7) TMI 811
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.... "1. In law and in facts and circumstances of the Appellant's case, the learned C1T(A) has grossly erred in points of law and facts. 2. In law and in facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in confirming disallowance U/S.14A r.w. rule 8D of I.T. Rules for Rs.15,28,320/- 3. Your appellant reserves the right to add, alter, amend all or any of the above grounds of appeal as may be advised from time to time." 3. The brief facts of the case are that originally the assessee filed an appeal before ITAT, Ahmedabad regarding disallowances made under section 14A of the Act. The ITAT vide order dated 15-03-2003 allowed substantial relief to the assessee and restored the matter back to the file....
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....FRC on the ground that income generated by way of income/gain on the above mentioned investment were taxable and not exempt and therefore the investments of Rs. 11.80 crores do not qualify for disallowance under section 14A of the Act. The AO in his order further held that net interest expense of Rs. 65,88,474/- (Rs. 27,83,07,877-interest expenses) minus Rs. 27,17,19,403/- (interest income) has to be considered for disallowing interest expense under section 14A of the Act. He further held that a sum of Rs. 1,11,52,075/- worked out at 0.5% of the average exempt assets of Rs. 23,04,14,963/-was not allowable under section 14A of the Act, as it is based on the binding formula as provided under section 14A of the Act. Accordingly, the Ld. Assess....
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.... 14A of the Act is called for. The counsel for the assessee drew our attention to page 2, para 2.2 of the assessment order, wherein he pointed out that the assessee submitted that the assessee company had enough interest-free funds available amounting to Rs. 26.46 crores to make tax-free investments and it had not utilised the borrowed funds for the purpose of making investment. He then drew attention to page in 19 of the paper book to contend that after deducting a sum of Rs. 11.80 crores (as accepted by Ld. Assessing Officer in the assessment order), then the investment in tax-free funds amounted to only Rs. 17 crores. Accordingly, since interest-free funds available with the assessee were in far excess of the tax-free investment made by ....
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....ilable with assessee were much larger as compared to investment, disallowance of assessee's claim for interest expenditure by applying section 14A was incorrect. In case of Gujarat Fluoro chemicals Ltd.[2020] 120 taxmann.com 433 (Gujarat), the Gujarat High Court again reiterated that where interest free funds available with assessee were far more than gross investment, it could safely be harboured that interest bearing funds was not invested by assessee and, thus, no disallowance under section 14A to be made. In view of the consistent position taken by the Gujarat High Court, as applied to the facts instant case, in our considered view, no disallowance is called for in respect of interest expenses under section 14A of the Act, when the ....
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....ling expenses, operating expenses, etc. That such investment decisions are highly strategic in nature and are required to be made by highly qualified and experienced professionals, require research and analysis, need to attend board meetings and make policy decisions. By no stretch of imagination it can be assumed that such activities are done without incurring any expenditure. The disallowance of administrative expenditure under section 14A of the Act was again affirmed by the Mumbai ITAT in the case of Zee Entertainment Enterprises Ltd.[2017] 81 taxmann.com 379 (Mumbai). The Ahmedabad in the case of Sun Pharmaceutical Industries Ltd.[2017] 84 taxmann.com 217 (Ahmedabad - Trib.)directed the A.O. to compute the disallowance for administrati....
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....ant case, the assessee has earned dividend income which was exempted u/s 10(34) of the Act. No disallowance was made by the assessee in relation to such dividend income. The assessee claims that it has not incurred any expenses in relation to such dividend income. However, on perusal of its Financial Statement, we note that there were sale and purchase of investment as evident from schedule 6 of the Financial Statement, placed on page 37 of the PB. ............................................................................................................. From the above schedule, it can be seen that there was investment in mutual funds amounting to Rs. 240,061,953/- which has been sold during the year. Similarly, the investment has bee....