TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 653
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....found that the assessee had earned tax free income, in respect of which disallowance of Rs. 20,72,918/- was made by the assessee under Section 14A of the Act. The Assessing Officer had examined the disallowance as made by the assessee and found that the working of the disallowance was not correct. The Assessing Officer, therefore, re-worked the disallowance under Section 14A of the Act at Rs. 12,39,84,226/- and accordingly made the addition. The assessment was completed under Section 143(3) of the Act on 09.12.2018 at total income of Rs. 578,58,26,070/-. 3. Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now the assessee is in second appeal before us. The following grounds have been taken in this appeal: - "Non-speaking order u/s. 250 without considering written submission - Bad in Law 1. The learned CIT(A) has erred in law & in facts by not considering & disposing off various grounds taken by the Appellant in appeal and instead issued show cause notice with the sole objective of....
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....n fact and in law in not adhere to the binding judicial precedents established in the appellant's own case vide the order of the Hon'ble ITAT Ahmedabad & Hon'ble Gujarat High Court for A.Y. 2008-09 to A.Y. 2013-14 wherein disallowance u/s. 14A was restricted to the suo molo disallowance of administrative expenses made by the Appellant. The learned CIT(A)'s deviation from this well-settled position in identical factual circumstances is a clear violation of judicial discipline, rendering the impugned order untenable and unsustainable in law. Interest expenses disallowed u/s. 14A r.w.r. 8D. despite ample own funds 6. The learned CITIA) has erred in law and in facts in confirming disallowance of interest expenses of Rs. 9,04,91,580/- under Rule 8FD(2)(1) read with Section 14A despite the fact that the Appellant had ample own funds to make investments. Judicial precedents, including rulings from the Hon'ble Supreme Court Jurisdictional High Court and the appellant's cases for A.Y. 2014-15 and 2015-16 confirm that no disallowance under Rule 8D(2)(il) is warranted in such situations Disallowance uls.144 r.w.r. 8D based on total investment....
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....relied upon various judgements in his paper-book and also submitted that identical view was taken by the Tribunal in the assessee's own case in A.Y. 2014-15 and 2015-16. 6. Per contra, Shri Alpesh Parmar, Ld. CIT-DR supported the orders of the lower authorities on this issue. 7. We have considered the rival submissions. All the grounds taken by the assessee pertain to addition of Rs. 12,39,84,226/- made under Section 14A of the Act read with Rule 8D of the Income Tax Rules. The first contention of the assessee that the Assessing Officer did not record dis-satisfaction with suo moto disallowance of Rs. 20,72,918/- made under Section 14A of the Act by the assessee, is not found correct. The Assessing Officer in the assessment order had reproduced the submission dated 20.11.2018 made by the assessee in this respect and, thereafter, recorded the fact that the explanation of the assessee was not acceptable for the reason that the Department had filed SLP against the decision of Hon'ble Gujarat High Court, which was pending before the Hon'ble Supreme Court on the same issue. The Assessing Officer, after rejecting the working of expenses as made by the assessee, had reworked the dis....
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....nd of the assessee exceeds the investments. In this regard we refer the judgment of The Hon'ble Gujarat High Court in the case of CIT vs. Torrent Power Ltd. reported in 363 ITR 474 where it was held as under: It was noted from records that the assessee was having share holding funds to the extent of 2607.18 Crores and the investment made by it was to the extent of Rs. 195.10 Crores. In other words, the assessee had sufficient funds for making the investments and it had not used the borrowed funds for such purpose. This aspect of huge surplus funds is not disputed by the revenue which earned it the interest on bonds and dividend income. [Para 7] 13.3 In view of the above we hold that there cannot be any disallowance of interest expenses against the impugned exempted income." 8.1 As already discussed earlier, the own funds available with the assessee was in much excess than the investments made by the assessee. Further, the Assessing Officer had also not given any finding that any interest-bearing fund was utilised for making these investments and the disallowance was based on mere presumption. Considering these facts, the disallowance in respect of interest ....