9911796707
Advanced Search 
TMI Blog2016 (2) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... which make it unreasonable, unjustified and bad in law. 2. That the action on the part of the assessing officer is highly arbitrary, improper and without application of mind, unreasonable, unjustified and bad in law and deserves to be deleted, so that proper justice can be given to the applicant. Date of Hearing 5.1.2016 Date of Pronouncement 18.1.2016 3. That on facts and circumstances of the case, the learned assessing officer has erred while making addition on account of Section 14A of Rs. 5,83,545/- which is illegal, unjustified and required to be deleted." 2. Brief facts of the case as recorded by the ld. Assessing Officer are as under:- 2.1. The assessee filed its return of income for assessment year 2009-10 on 27.09.2009 dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee has not earned any exempt income during the year under consideration. He reiterated that that the assessee has made the investments in its subsidiary companies and other group companies. The Ld.AR submitted that the assessee has capital and free reserves amounting to Rs. 68,41,12,730/- and the investment during the year amounts to Rs. 1,75,77,400/- He further submitted that the assessee had earned a net profit of Rs. 4,29,51,263/- and the net surplus was Rs. 2,71,38,381/-. 4.2. The ld.AR submits that the assessee had also taken loan on which it has paid an interest amounting to Rs. 2,10,93,484/-. The ld.AR argued that the Ld.AO on his whims and surmises has assumed that the interest bearing funds have been utilised for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is evident from the balance sheet of the assessee that, its investments in shares were only in its subsidiary companies from where the assessee has not earned any dividend income. The assessee over the previous years has made investment in its subsidiary companies and group companies to an extent of Rs. 2,50,51,420/-, under the sub head, "Equity shares of subsidiaries Companies(unquoted)" and an amount of Rs. 2,50,14,000/- under the sub head, "Equity shares of other Companies(unquoted)". 6.2. The controversy raised in this case is that the assessee had not earned or received any dividend in the year under consideration and, therefore, no disallowance can be made by invoking the provisions of Section 14A of the Act. Hon'ble Jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was incurred, no disallowance should be made under Section 14A. In other cases, the Assessing officer would have to determine the amount of expenditure incurred in relation to the income which did not form part of the total income and the said basis had to be reasonable and based on the acceptable method of apportionment. Expounding the expression "in relation to" appearing in Section 14A as interpreted in Maxopp Investment Ltd. (supra), would include "in connection with" or "pertaining to". 6.5. Ld.DR has placed his reliance upon the Circular no 5 of 2014 dated 11.2.2014. In our opinion, there is no merit in the above submissions of the Ld. DR in view of the decision of Hon'ble Calcutta High Court in the case of Bhartia Industries L ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
