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TMI Blog2015 (3) TMI 531X X X X Extracts X X X X X X X X Extracts X X X X ..... partmental authorities have erred in considering it a case fit for any disallowance whatsoever in pursuance of section 14A. 2. Without prejudice, on the facts and in the circumstances of the case, the Departmental authorities have erred in upholding the aforesaid disallowance u/s.14A in a sum of Rs. 14,05,012/-. 3. The appellant craves leave to add to, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 10/12/2010, thereby the Assessing Officer (AO in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the above appeal, the assessee has raised effectively 2 grounds as underi) No disallowance whatsoever in pursuance of section 14A is warranted in the assessee's case. ii) Without prejudice to the above contention, the assessee has challenged the upholding of aforesaid disallowance u/s. 14A to the sum of Rs. 14,05,012 by the Ld. CIT(A). 2. The assessee has filed before your Honours, Statement of Facts cum Synopsis on pages 1 to 10 of the paper book. The assessee relies upon the said Synopsis. On the first ground raised by the assessee that no disallowance whatsoever u/s. 14A is warranted in assessee's case, the assessee begs to draw your Honours' kind attention to page 4 para 4 of the Synopsis wherein the assessee has rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's case, the A.Y. involved is 2008-09 where also, Rule 8D is applicable. In view of the above, the assessee submits that no disallowance u/s. 14A can be made in assessee's case. 3. So far as ground No. 2 is concerned, the assessee has challenged disallowance of Rs. 14,05,012 upheld by the CIT(A) u/s. 14A. With regard to the above ground, the assessee submits that the A.O. had worked out disallowance u/s. 14A as under: - i) Out of interest Rs. 96,31,239 ii) Out of Administrative expenses Rs. 8,32,685 TOTAL Rs.104,63,924 4. In regard to above disallowance, the assessee had made written submissions before Ld. CIT(A) which have been noticed in detail on pages 3 to 12 of the CIT(A)'s order. Ultimately, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iate the argument of the Ld. AR that interest earned from investments in firm Gokuldham Developers is taxes as business income and hence investment to that extent cannot be held to be earning exempt income. Accordingly, there should not be any disallowance with reference to this investment u/s. 14A. This view is totally supported by the decisions cited by the appellant. Further, from investment in house property, rental income is shown and hence, for that investment also, there should not be any disallowance of expenses u/s. 14A." 5. In the Statement of Facts cum Synopsis on pages 9 and 10 in para 14, the assessee has submitted a summary of its contentions raised before your Honours. One of the contentions is that the Ld. CIT(A) has given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as discussed on pages 15 and 16 of his appellate order:- 1. Investments in Gokuldham Developers of Rs. 19,54,48,257 2 Investments in immovable properties of Rs. 11,37,240 Total investments deleted of Rs. 19,65,85,497 Thus, the Balance investments to be considered for the purpose of section 14A works out as under- 1. Investments of Partnership Firm M/s Shahibaug Developers Rs. 3,14,99,076 2 Shares in SGV Infrastructure Pvt. Ltd. Rs. 30,00,000 Total investments to be considered for section 14A Rs. 3,44,99,076 As against this, there are interest free funds available with the assessee as under:- 1. Share capital Rs. 3,02,76,000 2 Reserves and surplus Rs. 8,47,84,324 Total intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; "Chart Particulars' Amount Rs/- Amount Rs/- 1.Interest Expenditure 2,65,14,704 Less 1,98,00,650 - (CIT(A) page-16 67,14,054 (A) --------------- 67,14,054 2. Investment resulting into generation Of Tax Free Income Amount as on 31/03/2007 1,89,99,141 Amount as on 31/03/2008 3,44,99,076 5,34,98,217 Average Investment (B) -------------- 2,67,49,108 3. Working of Average Total Assets Amount as on 31/03/2007 47,99,84,321 Amount as on 31/03/2008 63,58,24,342 11,158,08,66 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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