2024 (6) TMI 571

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....020-21. 2. The revenue has raised following 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 expend....

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....investment in Partnership Firms/ AOP is Rs. 10,22,70,532/- and share of Loss is Rs. 1,33,08,293/-. Certain balances related 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 Instr....

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....at although AO had recorded his satisfaction before making disallowance u/s 14A, but in view of the decisions of the Hon'ble Jurisdictional Bombay High Court and also of the co-ordinate bench of ITAT, Mumbai 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. ....

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....the decision of the Ld. CIT(A) on this issue deserves to be upheld. Ground No. 2 :- Disallowance of foreign travel expenses a. Facts in this regard are that the assessee had claimed foreign travel expenses to the tune of 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 t....