2024 (6) TMI 571

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....g grounds of appeal: 1. "Whether on the fact and in the circumstances of the case and in law, the Id. CIT(A) has erred in deleting the disallowance u/s. 14A of the Act, without realizing the fact that the assessee is also earning exempt income on the strategic investments and expenses incurred on the same should be disallowed u/s 14A r.w.rule 8D. 2. Whether on the fact and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance of foreign travel expense amounting to Rs. 20,38,038/- with realizing the fact that the expenditure should be wholly and exclusively for business or profession, and the assessee had failed to validate that expenditure have been incurred wholly or exclusively for Business....

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....ed to Partnership Firm/AOP are reflecting in Other Financial Liabilities and current investment which has been duly considered for 14A working by the assessee. In Debentures Instruments of Companies 2,56,07,64,644/-   9,12,84,971/- Income from Debenture investment in PSC Properties Pvt. Ltd., Lavim Developers Pvt . Ltd. And Nalanda Shelter Pvt. Ltd. Debenture interest has been duly offered to tax in the return of income. It has not been claimed as an exempt income for the year. In equity instrument of companies- Co-operative Banks 15,37,525/- - - No exempt income earned from Equity Instruments in co-op banks during the year. National Saving Certificate-Banglore 1,000/- - - No exempt income earned from NSC during the year....

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....umbai relied upon by the appellant, held that the disallowance made by the AO over and above the suo-moto disallowance is not justified. iv. We have carefully considered the submissions made by the Ld. AR as well as Ld. DR. The statement of monthly average of investments has been submitted based on which the total average has been worked out at 5,32,99,615/-. Based on this suo-moto disallowance at Rs. 53,79,626/- has been rightly calculated by the Assessee. The AO has taken into account the investments which have not yielded income. In this regard, decision of the Hon'ble Jurisdictional Bombay High in the case of Pr. CIT v/s Ballarpur Industries Ltd (ITA No. 51/2016, order dated 13.10.2016) has been relied upon by the Ld. CIT(A) in which ....

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.... Rs. 20,38,038/- as mentioned in point No. 23 of the Tax Audit report. As the assessee did not justify the nature of these expenses and its nexus with business and profession, the same was disallowed by the AO on the ground that it had not been incurred for the purposes of business. The Ld. CIT(A) noted that the reply filed by the assessee during the assessment proceedings was not considered by the AO. The Ld. CIT(A) sought the comments from the AO on the submission of assessee. Since no reply was received from the AO, the Ld. CIT(A) deleted the addition made by the AO after observing that foreign travel expenses were incurred for business purposes. b. We have heard the Ld. AR as well as the DR on this issue. It has been explained that th....