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TMI Blog2014 (2) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... he interest received as well as paid would itself show that the funds invested are much higher than that borrowed, for which the interest is paid, so that the difference would only be on account of investment of own capital - no hard and fast rule in this respect could be prescribed, and it is well open for the assessee to claim that all the borrowed funds have been invested for business purposes – Relying upon CIT vs. Reliance Utilities & Powers Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] - the assessee would be liable for deduction of the entire amount of interest paid against the total interest income. Disallowance u/s 14A of the Act r.w Rule 8D of the Rules – Held that:- The decision in High Court in the case of Godrej & Boyce Manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim on the basis of absence of a nexus having been shown between the borrowed capital and its utilization for earning interest. Even as the facts for all the years are broadly similar, the same would have to be dealt with separately in view of the differences nevertheless attending the same. 3.1 For A.Y. 2005-06, the interest expenditure incurred is at Rs. 97,200, as against the interest income from unsecured loans at Rs.56,000/-. On being enquired by the Bench as to how the assessee claims complete nexus as well as justifies the loss, the ld. AR would state that the interest on the loans given was lesser than that at which the loan/s was secured, being at the prevailing market rate. The statement made is without reference to and sans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the borrowed or own funds which stands invested in the partnership firms, we would like to clarify that the wide variation between the interest received as well as paid would itself show that the funds invested are much higher than that borrowed, for which the interest is paid, so that the difference would only be on account of investment of own capital. Also, no hard and fast rule in this respect could be prescribed, and it is well open for the assessee to claim that all the borrowed funds have been invested for business purposes. Reliance for the purpose is placed on the decision by the hon'ble jurisdictional High Court in the case of CIT vs. Reliance Utilities Powers Ltd. [2009] 313 ITR 340 (Bom.) Accordingly, therefore, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when confronted with the said directions by the first appellate authorities, per paras 21 22 of his order, could not point to us any cause of grievance to the assessee, except for an apprehension that the A.O. may not observe the directions of the first appellate authority in letter and spirit. We find no reason to interfere with the clear directions in the matter by the ld. CIT(A); rather, would clarify that the onus to support its case with facts and figures would be on the assessee. The assessing authority, on his part, is bound by law by the directions of a higher appellate authority and, thus, no case for apprehension exists. We decide accordingly, dismissing the assessee's ground no.3. 5.2 The same directions, i.e., as for AY 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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