TaxTMI 
TaxTMI 
2016 (9) TMI 1654
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....ing to Rs. 19,22,89,567/-" 2. Facts in brief, are that the assessee is a resident company mainly engaged in the business of providing financial services and filed its return of income for AY 2010-11 declaring an income of Rs. 452,90,14,813/- which was processed under Section 143(3) vide assessing officer [AO] order dated 12.03.2013 wherein total income was recomputed at Rs. 469,18.76,502/- after making certain adjustments and disallowances including additional disallowance under section 14A amounting to Rs. 13,66,34,139/-. The assessee had made suo-moto disallowance of Rs. 5,56,55,427/- under Section 14A while computing its income but the same was recomputed at Rs. 19,22,89,566/- by AO after applying Rule 8D. Thus, an additional disallowan....
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....free funds for the purpose of making investments. Accepting the contentions of the assessee and observing the fact that net worth of the company far exceeded its investment, CIT(A) concluded that no disallowance could be made on interest expenditure. The only addition sustained by CIT(A) under Section 14A Rule 8D, was to the extent of 0.50% of average investment towards expenditure for administrative purposes. Thus, the claim of the assessee was partly allowed. Aggrieved by the stand of the CIT(A), revenue is in appeal before us. 3. At the outset, the Ld. Representative [AR] for the assessee drew our attention to the fact that this matter has continuously arisen in various years in assessee's own case and has already been settled in favour....
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....apable of yielding interest income, has not been examined properly either by the Assessing Officer or by the learned Commissioner (appeals). Therefore, respectfully following the decision of the Hon'ble jurisdictional High Court in Reliance utilities and Power Ltd (supra), we direct the Assessing Officer to re-examine the nexus of interest free funds and investments made. In case, the interest-free funds are more than the investment, that interest should be cost excluded from the working of the disallowance and in that situation only administrative costs can only be disallowed. Other workings given by the assessee are not been considered in view of the aforesaid direction. We thus, set aside the impugned order passed by the learner Commissi....