2016 (5) TMI 576

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..... ssee have filed cross appeals. Assessee-company, engaged in the business of developing and building housing projects, filed its return of income on 26. 09. 2009, declaring total income at ₹ 5, 67, 39, 335/-. The assessment order was completed, u/s. 143(3) of the Act, on 30. 12. 2011, determining the total income of the assessee at (-)Rs. 4, 00, 57, 592/-. 2. The effective Ground of appeal is about disallowance made u/s. 14A r. w. Rule 8D of the Income tax Rules, 1962, (Rules). During the assessment proceedings the AO found that the assessee had made an investment of ₹ 52 crores in equity shares of Western MP Infrastructures, that it had paid interest of ₹ 2. 22crores, that it had not made any disallowance u/s. 14A of th .....

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..... e provisions of section 14A were applicable, that the provisions were applicable irrespective of the fact whether or not the exempt income was received, that the investment was made out of its own funds and the same were not interest bearing funds , that the possibility of utilisation of borrowed funds for the purpose of making investment could not be ruled out. He directed the AO to work out the disallowance as per the formula provided in sub clause(ii) of Rule 8D(2). Further he directed the AO to adopt the average value of assets to ₹ 153. 54 crores. He further directed the AO to restrict the disallowance under rule 8D(2)(iii) to ₹ 5. 00 lakhs only. 4. Before us, the Departmental Representative (DR) stated that matter could .....

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..... 9] 317 ITR (AT) 86 (Delhi) [SB] (para 15) ii. CIT v. Chugandas and Co. [1964] 55 ITR 17 (SC) (para 14) iii. CIT v. Cocanada Radhaswami Bank Ltd. [1965] 57 ITR 306 (SC) (para 14) iv. CIT v. Corrtech Energy (P. ) Ltd. [2015] 372 ITR 97 (Guj) (para 15) v. CIT v. Holcim India (P. ) Ltd. (I. T. A. No. 486 of 2014 decided on 5- 9-2014) (para 15) vi. CIT v. Hero Cycles Ltd. [2010] 323 ITR 518 (P H) (para 15) vii. CIT v. Lakhani Marketing Incl. [2015] 4 ITR-OL 246 (P H) (para 15) viii. CIT v. Rajendra Prasad Moody [1978] 115 ITR 519 (SC) (para 10) ix. CIT v. Shivam Motors (P. ) Ltd. (ITA No. 88 of 2014 decided on 5-5-2014) (para 15) x. IT v. Winsome Textile Industries Ltd. [2009] 319 ITR 204 (P .....

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