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TMI Blog2016 (2) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... se evidences were not available at the time of assessment with the Assessing Officer, therefore, in the interest of justice, we set aside the order of the ld CIT(A) and directed to give the opportunities to the Assessing Officer on evidence considered while deciding the assessee's appeal on disallowance of interest and disallowance on 14A. - Decided in favour of revenue for statistical purposes only. - ITA No. 916/JP/2013 - - - Dated:- 3-12-2015 - T. R. Meena, AM And Laliet Kumar, JM For the Appellant : Shri Ajay Malik ( JCIT ) For the Respondent : Shri Rajeev Sogani Shri Rohan Sogani ( CA ) ORDER Per T R Meena, AM This is an appeal filed by the revenue against the order dated 16/09/2013 of the learned C.I.T.(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer observed that the assessee had invested ₹ 2,90,14,18,087/- in purchasing units of Mutual funds, which was shown as investments in its books of account by the assessee company. The source of the same was inquired and it was found that other than redemption of earlier units of Mutual funds, the assessee had invested in the said units from its OD Account in SBI Bank. He further observed that on perusal of bank account statement on the dates of investment in the mutual fund units, it was found that in all, total debit balance of ₹ 45,23,383/- occurred due to this investment, on which the assessee company paid interest to the bank @ 10% on overdraft. The ld Assessing Officer analysed Section 36(1)(iii) of the Act and held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther relied on the decision of Hon'ble Mumbai ITAT in the case of M/s Gherzi Eastern Limited (ITA No. 6562/Bom/94 dated 23rd September, 2002 wherein it has been held that some administrative expenditure was definitely attributable towards earning of this dividend income. He further relied on the decision of Hon'ble Supreme Court in the case of Distributors (Baroda) Pvt. Ltd. 236 ITR 456, Hon'ble ITAT Mumbai Bench decision in the case of M/s Citicorp Finance (India) Ltd. 12 SOT 248 on expenditure incurred on management or administrative expenses, collection of dividend or on encashing of a few dividend warrants. He further relied on the decision of Hon'ble Bombay High Court in the case of Godrej Boyce Vs DCIT in IT appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther held that the ld Assessing Officer was not right by making disallowance U/s 14A because the investment was made out of interest free fund available with it. He further held that provisions of Rule 8D cannot be invoked a mechanical manner without bringing out the fact that some expenditure was in fact incurred by the appellant for earning exempt income. The ld Assessing Officer has to correlate the expenditure incurred by the assessee with exempted income earned. After relying on the various case laws mentioned above, he deleted the addition. 4. Now revenue is in appeal before us. The ld DR vehemently supported the order of the Assessing Officer and argued that without any expenditure no income can be earned. It is imaginary for bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book and argued that all the details were submitted before the ld Assessing Officer and explained the source of investment, which was available with the assessee from the share capital received from time to time and redemption of mutual fund account from time to time. The ld Assessing Officer has not established the nexus to any expenditure incurred and with exempted income earned in the form of dividend. He further relied on the order of the ld CIT(A) and prayed to confirm the order. 6. We have heard the rival contentions of both the parties, perused the material available on record and also gone through the paper book submitted by the assessee. The assessee claimed that it has furnished evidence of interest free fund available with it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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