TaxTMI 
TaxTMI 
2025 (6) TMI 1381
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....issioner of Income Tax (Appeals), (hereinafter referred to as "CIT(A)"), National Faceless Appeal Centre (hereinafter referred to as "NFAC"), Delhi under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the "Act"), all dated 31.01.2024. While both the assessee and department are in cross appeal before us for A.Y. 2011-12 & 2014-15, for A.Y. 2015-16 only the assessee has come up before us. 2. At the outset itself, Ld. Counsel for the assessee stated that for all 3 assessee's appeals for A.Y. 2011-12, 2014-15 & 2015-16 in ITA Nos. 572, 573 & 574/Ahd/2024; respectively, the assessee has opted to settled the dispute under the VSV Scheme, 2024. Copy of Form No.2, being acceptance of assessee's application for settleme....
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....ovided in Rule 8D(2)(ii) of the Income Tax Rules, 1962 (in short 'IT Rules'). Our attention was drawn to the grounds raised in this regard by the Revenue in both years as under: ITA No.554/Ahd/2024 - A.Y. 2011-12 "1. Whether the Ld. CIT(A) was justified in deleting the addition of Rs. 2,86,58,206/- made under section 14A read with Rule 8D(2)(ii), without appreciating the findings of the Assessing Officer? 2. Whether the Ld. CIT(A) was justified in deleting the addition of Rs. 2,86,58,206/- made under section 14A read with Rule 8D(2) (ii), without appreciating the fact that the assessee is having mixed funds and that the assessee has incurred interest expenditure to the tune of Rs. 2,78,26,692/-, for which the onus was on the a....
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....which held that where sufficient own funds were available it is to be presumed that the investments have been made out of the own interest free funds calling for no disallowance of interest u/s. 14A of the Act. It was pointed out that the ITAT in the preceding years had followed the decision of the Jurisdictional High Court in several cases holding so. Our attention was drawn to the findings of the CIT(A) in his order for A.Y. 2011-12 at para 5.2.2 to 5.2.2.4 as under: "5.2.2 Regarding disallowance of Rs. 2,86,58,206/ under Rule 8D(2)(ii) of the IT Roles, it is seen that in aforesaid decision by the Hon'ble ITAT mentioned supra, the addition for the relevant years in that appeal were deleted on the ground that interest free funds so a....
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.... Vs. Gujarat Industrial Development Corporation [2013] 318 Taxman 142 (Guj) has held that it is for the revenue to establish a nexus between the interest bearing funds borrowed and those invested by the assessee respondent and only when it is shown that the interest free funds are not available with the assessee, the question would arise of fastening the tax liability on the assessee. Other decisions of jurisdictional High Court that support the view point of the appellant are CIT Vs. Torrent Power Ltd. [2014] 222 Taxman 367 (Guj.) and CIT VS. UTI Bank Ltd. [2013] 215 Taxman 8 (Gu).) (Mag.). In the case of CIT Vs Hitachi Home and Life Solutions (1) Ltd (2014) 41 Taxman 540 (Guj.), Hon'ble Gujarat High Court has held that where assesse....
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....respectfully following the decision of the Hon'ble Jurisdictional Tribunal in case of the appellant & with the facts being found to be similar, it is held that since appellant had sufficient own funds to undertake investment in shares, the disallowance of Rs. 2,86,58,206/- under Rule 8D(2)(ii) is hereby deleted. 5.2.2.4 Hence, 14A disallowance on Investment portfolio is quantified @ 0.5 percent of avg. Investments as per Rule 8D(2) (iii) i.e. Rs. 15,72,748/- made in assessment and being confirmed in this appellate order. As the quantum of addition made in assessment has been reduced from Rs. 3,02,30,955/- to Rs. 15,72,749/-, appellant gets relief to the tune of Rs. 2,86,58,206/-. Hence, ground no. 7 is treated as Partly Allowed." It ....