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TMI Blog2015 (10) TMI 1713X X X X Extracts X X X X X X X X Extracts X X X X ..... e year under consideration is called for. As far as disallowance of administrative expenses is concerned, we find that that in appeal for A.Y. 07-08, the disallowance was restricted to ₹ 50,000/- by the Co-ordinate Bench but however for the year under consideration being A.Y. 2008-09 and since provisions of Rule 8D are held to be mandatory, we are of the view that the disallowance on account of administrative expenses be made as per the formula prescribed i.e. 0.5% of average investments meaning thereby that the disallowance u/s.14A be restricted to ₹ 1,78,175/- as against ₹ 10,20,670/- made by A.O. - Decided partly in favour of assessee. - I.T. A. No. 2119/AHD/2012 - - - Dated:- 10-9-2015 - SHRI ANIL CHATURVEDI, A.M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the same being incurred for the purpose of business and incurred in the ordinary course of business was rightly claimed by your appellant. It be held so now and the claim be allowed. 3. The learned CIT(A)-IV, Baroda has erred in disallowing ₹ 10,20,670/- by invoking the provisions of section 14A of the Act. Your appellant submits that the provisions of section 14A are not applicable and hence the disallowance is not justified. It be held so now and addition made by the AO be deleted. 4. The learned ACIT has erred in charging interest u/s 234B of the Act. The same be deleted now. 1st ground is general and requires no adjudication and therefore it is dismissed as not pressed. 2nd ground is with respect to disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions of the Ld. A.R in this regard. The AR in its above submission has mainly stated that the AO has erred in disallowing ₹ 10,20,670/- u/s 14A rwr 8D. As per the AR no expenses were incurred in relation to earning tax free income. Without prejudice to this, the AR has further submitted that the disallowance, if any, be restricted to 0.5% of average investment since no investment have been made in the past out of borrowed fund. But the very fact is that there is investment of ₹ 3,56,34,924/-in the case of appellant. The A.R submitted that no expenses were incurred in relation to earning tax free income on such investment. The AR has not furnished relevant details as well as evidences proving that the above investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments as shown in the audited Balance Sheet, as on 31st March 2004 to 31st March, 2008 and pointed out that there is no change in the investments in any of those years except for a marginal increase of investments of ₹ 5,000/- on 31.03.2005 and further all these investments have been made out of interest free funds. He further submitted that that on identical facts for A.Y. 07-08 in C.O No. 198/A/2010 (in ITA No. 1945/A/2010), the Hon ble ITAT after considering that the investments were same on the first day and the last day of the financial year and there being no sale or purchase of investments considering the administrative expenses, confirmed the disallowance u/s. 14A of ₹ 50,000/-. He placed on record the copy of the afores ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08, the co-ordinate Bench of Tribunal had accepted the contention of Assessee that no borrowed funds have been used for making investments and therefore deleted the addition of the interest portion. In such a situation, when there is no change in the value of investments or its composition from that of earlier years and when in earlier year the fact of non utilization of interest bearing funds having been accepted, we are of the view that no disallowance on account of interest in the year under consideration is called for. As far as disallowance of administrative expenses is concerned, we find that that in appeal for A.Y. 07-08, the disallowance was restricted to ₹ 50,000/- by the Co-ordinate Bench but however for the year under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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