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TMI Blog2014 (5) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... common order. 2. The sole ground that arises for our consideration for the Assessment Year 2008-09 is ground no.2 which reads as follows. "2. That the Ld.Commissioner of Income Tax (Appeals) has erred in confirming disallowance of interest of Rs.59,800/- u/s 14A r.w.Rule 8D of the I.T. Rules, 1962." 3. The Ld. Counsel for the assessee Mr. M.K. Madan, C.A. submits that the A.O. cannot straight away proceed to apply Rule 8D without considering the correctness of the claim made by the assessee in respect of expenditure incurred in relation to exempt income. For this proposition he relied on the decision of the Hon'ble Bombay High Court in the case of Godrej & Boyce Manufacturing Co.Ltd. vs. DCIT ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestments have come down to Rs.1.49 crores on 31st March, 2009 from Rs.1.57 crores as on 31st March, 2008, which means the assessee has made divestment of Rs.7 lakhs. He further pointed out that there is a net decrease of loan funds during the year to the tune of Rs.27 lakhs and the funds have been increased from Rs.9.14 crores as on 31.3.2008 to Rs.12.30 crores as on 31.3.2009, which demonstrates that the investments have not been made from loan funds. 3.4. For the Assessment Year 2009-10, there was one more ground relating to S.43B. He relied on the decision of Hon'ble Calcutta High Court reported in 292 ITR 470 (Cal), wherein it was held that S.43B(F) is unconstitutional. He also referred to the admission of SLP by the Hon'ble Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestments. Even the profits during the year are in excess of investments. Even if it is a case of mixed funds, the Hon'ble Bombay High Court in the case of Reliance Utilities & Powers Ltd. (313 ITR 340) held that, a presumption would arise that the investments are made out of interest free funds. Thus, we uphold the contentions of the assessee on this count. Regarding the arguments that the assessee company has not earned any income from the impugned investment made, we find that the issue is decided against the assessee by the Special Bench of the Tribunal in the case of Chemivest Ltd. As regards the arguments that the Assessing Officer should first record his satisfaction, as to the correctness of the claim of the assessee, before procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld the order of the Assessing Officer. The assessee wants us to set aside the matter to the file of the Assessing Officer with the direction to follow the decision of Hon'ble Supreme Court. As the Ld.AO has already disallowed the amount and the Ld.Commissioner of Income Tax (Appeals) has confirmed the same by referring to the order of the Hon'ble Supreme Court, we see no purpose for setting aside the matter to the file of the A.O. It is open for the assessee to move appropriate applications before this Tribunal u/s 254(2), as and when the Hon'ble Supreme Court adjudicates the matter. Thus, we reject this ground of the assessee. 9. In the result the appeals of the assessee for both the AYs are dismissed. (The order is pronounced in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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