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TMI Blog2013 (10) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... tain eventualities only - AO/FAA has not mentioned such eventualities. If the assessee has not claimed any expenditure for earning exempt income, it cannot always be held that there were always a cost involved. Reliance has been placed upon the judgment in the case of Hero Cycles Ltd.[ 2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT], wherein Hon’ble Punjab & Haryana High Court has held that contention of the Revenue that directly or indirectly some expenditure is always incurred which must be disallowed under section 14A and the impact of expenditure so incurred cannot be allowed to be set off against the business income which may nullify the mandate of section 14A, cannot be accepted. Disallowance under section 14A requires finding of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. 2010, determining the total income at Rs. 38. 46 lacs. 2. Effective Ground of appeal pertains to conformation of the addition amounting to Rs. 1, 63, 544/- under section (u/s. )14A of the Act. During the assessment proceedings, AO found that the assessee was earning exempt income through long term capital gain, that he had not shown any expenses attributable to earning of said income. He directed the assessee, vide order sheet entry dated18/11/2010, to explain as to why Section 14A r. w. Rule 8D of the Income-tax Rules, 1962 (Rules)should not be applied to calculate the expenses attributable to the exempt income. He As filed his reply on 30/11/2010 in respect of query raised. AO, after considering the same, held that although no direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t filed by him profit of Rs. 18. 86 lakhs was shown as share of profit from firm, that share of profit from A. O. P. was shown at Rs. 4, 65, 772/-, that availability of the salary/ remuneration from company and firms for making investments in the shares was not proved by the assessee, that similar is the case with regard to interest received shown at Rs. 21, 67, 872/-, that he had not been able to substantiate completely that the new acquisitions of the shares had been made out of interest free funds available with him, that the bank account statement submitted by the assessee contained transactions of two types. Citing some examples of investment made by him, FAA held the borrowed funds had no proximate connection with the investments in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Bank were taken together as on 1. 11. 07 of the accounting year it would have proved that assessee did not use borrowed funds for making investment. He referred to page no. 37 of the paper book (PB). He relied upon the cases of Reliance Utilities and Power Ltd. (313 ITR 340-Bom High Court), Bunge Agribusiness (India) (P) Ltd. (64 DTR-Mum (Tri. )201), Reliance Industries Ltd. (79 DTR -Mum (Tri. )315). Departmental Representative (DR) supported the order of the FAA. 3 ITA No. 1167/Mum/2012 Ramesh R. Chheda 2. 3. We have heard the rival submissions and perused the material before us. We find that while upholding the order of the AO, FAA has held that assessee had made investment of Rs. 22. 58 lacs for purchasing shares of Barak Valley Che ..... X X X X Extracts X X X X X X X X Extracts X X X X
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