TaxTMI 
TaxTMI 
2023 (6) TMI 669
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....e of hearing." 2. Brief facts as stated are that, the assessee is a company, engaged in manufacturing sale of Sponge Iron, Ingots, Billet, TMT, power generation and supply. The case of the assessee for year under consideration was selected for scrutiny through CASS. Statutory notice u/s 143(2) of the I.T. Act was issued. Further, notices along with questionnaire were also issued to the assessee, in response AR of the assessee have attended the hearing from time to time and filed required documents/submissions. The ld. AO during the course of assessment proceeding has examined various issues and aspect of the case and after considering the various facts and circumstances, has made an addition by invoking section 14A of the I.T. Act, 1961. ....
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....certain case laws to be relied upon in order to decide the issue in hand. The relevant case laws and observation in the referred case laws are as under:- * South Indian Bank Ltd vs. CIT (2021) 130 taxmann.com 178 (SC), wherein Hon'ble Apex Court has held that: "Income Tax: Where interest free own funds available with assessee-banks exceeded their investments in tax-free securities; investments would be presumed to be made out of assessee's own funds and proportionate disallowance was not warranted under section 14A on ground that separate accounts were not maintained by assessee for investments and other expenditure incurred for earning tax-free income." * Bilaspur Nagrik Sahkari Bank Ltd. vs. DCIT, Circle(1), Bilaspur in ITA No. 55/R....
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.... funds and no disallowance would be warranted u/s. 14A r.w Rule 8D(2)(ii) of the Income Tax Rules, 1962 on the ground that separate accounts were not maintained by the assessee for investments and other expenditure incurred for earning of tax free income. 8. Backed by our aforesaid observations, we are unable to persuade ourselves to sustain the disallowance of interest expenditure of Rs. 3,99,790/- made by the Assessing Officer u/s. 14A r.w Rule 8D(2)(ii) of the Income Tax Rules, 1962 which is accordingly vacated. Thus, the Ground of appeal No.2 raised by the assessee is allowed in terms of our aforesaid observations." * DCIT vs. Hira Industries Ltd. (2018) 90 taxmann.com 429 (Raipur- Trib), wherein it has been held that: "Section 14....
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....ed by ld. CIT(A), since, there was sufficient funds available with the assessee to make the investment which is apparent from the statements produced hereinabove. The 2nd of the contention of the ld. AR was that the assessee has earned exempt income of Rs. 46,500/- which is evident from P & L account of the assessee available at page 21 of the assessee's paper book. The ld. AO has wrongly mentioned figure of exempted dividend income as Rs. 1,94,953/- at page 5 of the assessment order. It was the prayer of the ld. AR that since, there were sufficient funds available with the assessee for making the investments without using any interest bearing funds, therefore, disallowance of interest was unwarranted and unlawful. There was no expenditure ....