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TMI Blog2014 (11) TMI 1068X X X X Extracts X X X X X X X X Extracts X X X X ..... infirmity in the order of ld. CIT(A) in confirming the disallowance of administrative expenses which was incurred and attributable to earning of exempt income. - Decided against assessee - I .T.A. No. 1923/Mum/2012, I .T.A. No.5196/Mum/2012, I .T.A. No.5367/Mum/2012 - - - Dated:- 28-11-2014 - S/SHRI I.P. BANSAL, (JM) AND R.C. SHARMA (AM) For the Appellant: Shri Love Kumar For the Respondent: Shri Sunil Nahata O R D E R Per R.C. SHARMA, Accountant Member: The revenue has filed appeal against the order dated 1.11.2011 passed by the ld. CIT(A) for the assessment years 2008-09. The revenue and assessee have also filed cross appeals against the order dated 3.4.2012 passed by the ld. CIT(A) for the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 's submission also suggests that the aforesaid investment was made by the appellant company as strategic investment for the purpose of business wherein the sole intention was to carryout the business purpose of the appellant company. Further to that, it is also evident from the submission made by the appellant company that the aforesaid investments were made by the appellant company from its own fund and not from any borrowed funds. The investment made by the appellant company of ₹ 6,05,00,309/- in Syscon Corporation Ltd. which was wholly- owned subsidiary of the appellant company was invested from company's own funds and it is evident from the bank statement filed by the appellant company in support of its contention as Annex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w that the A.O. was not at all justified in his action in making the aforesaid disallowance and accordingly the addition so made by the A.O. is deleted. Thus, appellant's is ground of appeal is allowed. 5. Aggrieved by the order of ld. CIT(A), the assessee is in appeal before us. 6. We have considered the rival contentions, carefully perused the record, gone through the orders of authorities below and the judicial pronouncement referred by the lower authorities as well as ld. Representatives of both the parties during the course of hearing before us. From the record we found that the Assessee has made investment in group company which was 100% subsidiary of the Assessee. The investment was made as strategic investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant company has made investment of ₹ 14,55,00,309/- in a group company which was 100% subsidiary of the appellant company. Further to that, the appellant's submission also suggests that the aforesaid investment was made by the appellant company as strategic investment for the purpose of business wherein the sole intention was to carryout the business purpose of the appellant company. Further to that, it is also evident from the submission made by the appellant company that the aforesaid investments were made by the appellant company from its own fund and not from any borrowed funds. The investment made by the appellant company of ₹ 6,05,00,309/- in Syscon Corporation Ltd. which was wholly- owned subsidiary of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) of the IT Rules to the tune of ₹ 15,96,385/- However, it is definite that the appellant company needs to incur administrative expenditure to ensure the investment, which is generating exempt income. In this perspective, I am of the considered view that disallowance made by he AO as per rule 8D(2)(iii) of the IT Rules is completely justified taking note of the decision in the case of Godrej and Boyce Mfg Co.Ltd, reported in 328 ITR 81. Accordingly he addition made by the A.O. of ₹ 4,25,000/- under rule 8D(2) (iii) is confirmed. Thus, the appellant s this ground of appeal is partly allowed. 8. The finding recorded by the ld. CIT(A) has not been controverted by the ld.DR by bringing any positive material on record. Follow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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