9911796707
TMI Blog2015 (1) TMI 1223X X X X Extracts X X X X X X X X Extracts X X X X ..... n always argue that, like any normal businessman, its endeavour and intention was to use business loans for business purposes and own funds for investments. In the given case, assessee had shown that loans raised were for specific business purposes. It had suo motu made a disallowance for direct interest expenditure under rule 8D(2)(i) for A.Y. 2010-11, while claiming that no such expenditure was there for A.Y. 2009-10. For application of Section 14A(2), it is necessary for the AO to show that he is not satisfied with the correctness of the claim of assessee with regard to the expenditure claimed to have been incurred for earning exempt income. That this condition applies even where the claim is one of no or nil expenditure has been held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2010 came to ₹ 7.25 crores. Against total interest cost of ₹ 8,72,40,037 for A.Y. 2009-10 and ₹ 8,39,44,973 for A.Y. 2010- 11, assessee had offered no expenditure against exempt income, but for a sum of ₹ 9,18,542 for A.Y. 2010-11. Latter amount was suo motu disallowed by the assessee as interest expenditure directly attributable to the tax free investments. The AO while concluding the assessment applied Rule 8D(2)(ii) for working out the interest expenditure not directly attributable to any particular income and rule 8D(2)(iii) for working out the indirect expenditure other than interest. The disallowances came to ₹ 29,85,404 and ₹ 55,07,236 respectively. Component referable to interest came to ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had substantial own funds and the disallowances were made purely on presumptions. 7. We have perused the orders and heard the rival contentions. Assessee had share capital and reserves totalling to ₹ 337,287,692 and ₹ 355,450,356 as on 31.3.2009 and 31.3.2010 respectively, as seen from its audited Balance Sheet placed at PB page 20. As against this, its investment in listed shares were ₹ 13,877,323 and ₹ 48,740,155 as per Schedule-F to its final accounts placed at PB page 22. Incremental investment were only 1.52 crores for the year ended 31.3.2009 and ₹ 3.15 crores for the year ended 31.3.2010. This is clear from the working given at PB page 5. No doubt, assessee had loan funds of ₹ 611,984,554 and &# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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