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TMI Blog2016 (3) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee and founds pecific projects etc., and utilised for those specific purposes. In the absence of any material brought on record, to controvert the findings of the CIT(A) on factual aspects, as rightly held by the CIT(A) interest relatable to such loans cannot be attributed to the investments yielding interest-free income. The observation of the CIT(A) that unless nexus between the borrowals made by an assessee and the investments yielding exempt income made by the assessee is established, no disallowance under S.14A read with Rule 8D can be made is in consonance with the settled position of law laid down inter-alia in CIT V/s. SBI DHFL Ltd. (2015 (11) TMI 399 - BOMBAY HIGH COURT ) and CIT V/s. Hero Cycles Ltd. (2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT) relied upon by the learned counsel for the assessees in the written submissions field before us and other case-law discussed by the CIT(A) in the impugned orders, besides consistent with the view taken by the coordinate benches of the Tribunal in similar matters. In this view of the matter, we find no infirmity in the impugned orders of the CIT(A) on this issue. - Decided against revenue X X X X Extracts X X X X X X X X Extracts X X X X ..... t, inter alia, consisted of a portico and an open terrace, and the open terrace is accessible to the living rooms in the first floor. The assessee claimed the above projects as eligible for deduction under S.80IB(10) of the Act, and accordingly claimed deduction by offering profits under Percentage Completion Method. 4. From the information furnished by the assessee during the course of scrutiny proceedings, it was noticed by the Assessing Officer that the built up area of each residential unit in three projects is in excess of 1,500 sq. ft, as against the condition stipulated under S.80IB(10) that the residential unit has a built up area not exceeding 1000 sq. ft, where a such unit is situated within the cities of Delhi or Mumbai or within 25 Kms of the municipal limits of these cities and 1,500 sq. ft. at any other place. In this view of the matter and considering the detailed examination of this aspect done during the course of scrutiny assessment proceedings for the assessment year 2008-09, the Assessing Officer called for a note from the assessee in support of its claim for deduction under S.80IB(10) for assessment year 2009-10. After considering the letter of the assessee da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Modi Builders & Realtors Pvt. Ltd. in ITA No.1541/Hyd/2010 for assessment year 2007-08 vide order dated 31.3.2011, confirmed the disallowance made for the assessment year 2008-09. Relevant portion of the order of this Tribunal in the cases of these very assessees dated 22.3.2012 is extracted belowITA "2. The first common ground in these appeals is with regard to allowability of deduction u/s. 80IB(10) of the Income-tax Act, 1961. 3. After hearing both the parties, we are of the opinion that similar issue came for consideration before this Tribunal in the case of Modi Builders & Realtors Pvt. Ltd., in I.T.A. No.1541/Hyd/2010. The Tribunal vide order dated 31st March, 2011 held as follows: "11. We have heard both the parties and also perused the material available on record. The main contention herein is with regard to inclusion of portico and balcony for the purpose of determining the built-up area as per clause (a) of subsection (14) of section 80IB of the Income-tax Act, 1961. As per this clause the definition of builtup area is as follows: "80IB(14)[(a) - "built-up area" means the inner measurements of the residential unit at the floor level, including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conomic growth has to be interpreted liberally, the restriction on it too has to be construed so as to advance the objective of the provision and not to frustrate it. In our opinion this case law has no application to the facts of the assessee's case. The argument of the learned counsel for the assessee is good in part but the inference does not logically follow. In our opinion, the legislative expedience adopted to achieve that objective in the provision requires to be given effect on it is own language. There is no ambiguity in clause (a) of subsection (14) of section 80IB of the Act. As there is no ambiguity in the statutory language, resort to interpretation process to unfold the legislative intent becomes impermissible. The supposed intention of the legislature cannot then be appealed to whittle down statutory language which is otherwise unambiguous. If the intendment is not in the words used, it is nowhere else. The need for interpretation arises when the words used in the statute are on their own terms ambivalent and do not manifest the intention of the legislature. The words in the statute must, prima facie, be given their ordinary meanings. Where the grammatical constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer. 11. Facts in brief relating to this issue, in so far as ITA No.1784/Hyd/2013(M/s. Modi Shelters Pvt. Ltd.) is concerned, are that the Assessing Officer during the course of assessment proceedings noted that the assessee's investments in partnership firm and investments in associate company, M/s. Modi Builders & Realtors Pvt. Ltd have gone up by ₹ 35,00,250 during the previous year 2008-09. The income from the said investment is not includible in the total income of the assessee. It was also seen from the information furnished that the assessee company has paid interest on term loans to the extent of ₹ 45.36 lakhs during the year and also on OD accounts to the extent of ₹ 8.52 lakhs. It was further noticed that the assessee has earned interest of ₹ 14.73 lakhs during the previous year 2008-09, and the net interest expenditure incurred by the assessee was to the extent of ₹ 39.14 lakhs. The Assessing Officer noted in this context that while computing the total income under Chapter IV of the Act, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disallowance, assessee preferred appeal before the CIT(A). The CIT(A), after consideration of the detailed explanations and arguments of the assessee noted in the first place that all investments in equity shares of associate company, Modi Builders & Realtors P. Ltd. are not made during the current financial year and most of the investments are accumulated over a period of time from financial year 2006-07 to 2008-09, with the total amounting to ₹ 27,95,00,250 including the investment of ₹ 2.35 crores made during the financial year 2008-09 relevant to assessment year under consideration. As against this, it was noted that the net surplus funds available with the assessee in the financial year 2008-09 relevant to the assessment year under consideration was ₹ 11,11,38,273, which is higher than the investments made of ₹ 2.35 crores by the assessee company. Referring to a letter from Axis Bank pertaining to loan taken of ₹ 3.5 crores, he noted that the loan from Axis bank has been taken for business purpose, viz. to meet its working capital requirements for the development of housing projects. He also noted the plea of the assessee that there was no incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee made such a claim and the investments had been made by the assessee form out of its own funds and no part of borrowed funds had been used for purpose of making investment any time during the relevant previous year. With these observations, the CIT(A) held that no disallowance under S.14A read with Rule 8D can be made and accordingly deleted the additions made by the Assessing Officer for the relevant years. 14. Aggrieved by the orders of the CIT(A), Revenue has preferred the present appeals before us. 15. We heard the parties and perused the material on record, including the written submissions filed by the assessee. It is the claim of the assessees that there is no income earned by the assessee which did not form part of the total income returned and no investment has been made from out of the borrowed funds. The CIT(A) also taken note of the borrowals made by the assessee and found that borrowals have been made by the assessee for specific purposes, such as working capital requirements, specific projects etc., and utilised for those specific purposes. In the absence of any material brought on record, to controvert the findings of the CIT(A) on factual aspects, as rightl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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