2025 (2) TMI 1479

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....of 57 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, we find the reasons stated by the assessee are bonafide, which really prevented in filing the appeal in time. Thus, the delay is condoned and admitted the appeal for adjudication. 3. The assessee raised ground No. A to I in the grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the disallowance made by the Assessing Officer under section 14A of the Income Tax Act, 1961 ["Act" in short] r.w. Rule 8D of Income Tax Rules, 1962. 4. Brief facts relating to the issue are that the assessee is a compa....

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....excess of investments made in shares and securities and no borrowings were involved. He submits that the borrowings were only for working capital purposes and argued vehemently that no disallowance should be made towards interest expenditure. Further, he submits that the ld. CIT(A)/NFAC has failed to note and consider the well settled principle that when the assessee is able to establish availability of mixed funds including borrowed funds, the presumption is to be drawn in favour of the assessee, that investments made in shares and securities is out of own funds and disallowance of interest expenditure does not arise. He referred to the decision of Hon'ble High Court of Gujarat in the case of CIT v. Sintex Industries Ltd. [TCA No. 291 of 2....

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....m 02.06.2016 is applicable and the ld. CIT(A) rightly upheld the order of the Assessing Officer. She argued that the decision of the Hon'ble High Court of Gujarat is not applicable as it considered old Rule pertaining to the assessment year 2009-10. She also argued that the orders of this Tribunal, as relied on by the ld. AR, also not applicable in view of change in the amended Rule position with effect from 02.06.2016. Further, she vehemently argued that the Assessing officer recorded his satisfaction regarding the accounts of the assessee and found the disallowance made by the assessee on its own was not acceptable. Further, the disallowance made by the assessee on its own has no basis and the assessee failed to show on what basis the sai....

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....viz., (i) the amount of expenditure directly relating to income which does not form part of total income; (ii) incurring expenditure by way of interest and under clause (iii) an amount equal to one-half per cent of the average of the value of investment. Therefore, we find the argument of the ld. AR does not sound good in view of the amendment under IT (Fourteenth Amdt.) Rules, 2016 to sub-Rule (2) to Rule 8D w.e.f. 02.06.2016. Admittedly, the year under consideration is AY 2017-18 and the substitution to sub-Rule (2) to Rule 8D came into effect from 02.06.2016, which correctly attracts the year under consideration. Further, as rightly argued by the ld. DR that the decision of the Hon'ble High Court of Gujarat in the case of CIT v. Sintex I....