TaxTMI 
TaxTMI 
2024 (7) TMI 1376
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....ustaining the disallowance of Rs. 9,06,947/- made by the AO under Section 14A of the Act read with Rule 8D(2)(ii). 2. Whether on the facts and circumstances of the case, the learned CIT(A) has erred in not accepting the contention of the appellant that investment made in the partnership firm was out of surplus noninterest bearing funds available with the company. 3. Whether on the facts and circumstances of the case, the learned CIT(A) was right in confirming the action of the AO in including Bank Charges and Bank guarantee charges of Rs. 21,85,514/-, as interest on borrowings for the purposes of calculating disallowance u/s 14A of the Act read with Rule 8D(2)((ii). 4. Whether on the facts and circumstances of the....
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....he Rules") should not be invoked and disallowances are made accordingly. In response thereto, the assessee filed his submissions vide letter dated 25.02.2016 and contended that it has already disallowed a sum equal to 0.5% of average investments considering the expenses attributable to such investments. The assessee further contended that it had sufficient interest free funds for investments hence, in respect of interest, no disallowance is called for. Before the Assessing Officer, the assessee also submitted the status of the non-interest bearing funds. However, the Assessing Officer did not accept the contentions of the assessee and proceeded to make disallowance u/s 14A of the Act. Thereby, he made addition of Rs. 9,06,947/-. 5. Aggri....
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....thorities below. 9. In re-joinder, Ld. Counsel for the assessee submitted that the case is also covered in favour of the assessee by the judicial pronouncements by the Co-ordinate Bench of this Tribunal and the Hon'ble Supreme Court in the cases of Godrej Boyce Mfg. Ltd. in Civil Appeal No.7020 of 2011 dated 08.05.2017 and reliance was placed upon the judgement of Hon'ble Supreme Court in the case of Hero Cycles Pvt.Ltd. vs CIT 379 ITR 347 (SC). 10. We have heard Ld. Authorized Representatives of the parties and perused the material available on record. There is no dispute with regard to the fact that before the authorities below, the assessee had suo motto disallowed the expenditure related to administrative expenses. However, in res....
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....g term loans and advances to the tune of Rs. 9,83,69,635/-. After deducting the said investment, the amount of Rs. 30,27,87,265/- is available for investment and working capital requirements, therefore, the appellant submitted that no disallowance of interest can be made under Rule 8D(2)(iii). I have considered the argument of the appellant. It is seen that appellant has paid interest of Rs. 56,67,261/- which is not directly attributable to any income. This interest includes the bank charges and bank guarantee charges also which are part and parcel of the interest. Since, the funds available with the appellant company are invested in different assets, therefore, it cannot be directly be said that the funds received as share capital....
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....f the reasons which had prevailed upon the Assessing Officer, while dealing with the Assessment Year 2002-2003, to hold that the claims of the Assessee that no expenditure was incurred to earn the dividend income cannot be accepted and why the orders of the Tribunal for the earlier Assessment Years were not acceptable to the Assessing Officer, particularly, in the absence of any new fact or change of circumstances. Neither any basis has been disclosed establishing a reasonable nexus between the expenditure disallowed and the dividend income received. That any part of the borrowings of the assessee had been diverted to earn tax free income despite the availability of surplus or interest free funds available (Rs. 270.51 crores as on 1.4.2001 ....