2016 (2) TMI 910

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..... he strategic investments and exclude the strategic investments while calculating the disallowance under rule 8D for the purpose of section 14A of the Income Tax Act. - Decided in favour of assessee for statistical purposes.
SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER For the Appellant: Shri Rajiv Khandelwal, A.R. For the Respondent: Shri K. Mohandas, D.R. O R D E R Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 19.05.2014 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2010-11. 2. The sole issue raised by the assessee through his grounds of appeal is relating to the confir .....

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..... the Tribunal has made the following observations: "3. Rival contentions have been heard and perused the records. The A.O. has made the disallowance u/s 14A r.w. Rule 8-D at 0.5% of administrative expenses. There was no disallowance on account of interest while working out the disallowance u/s 14A of the Income Tax Act, 1961. It was argued by the learned A.R. that the assessee has investments in companies which are its group companies where the assessee holds substantial stake. The Id. A.R. submits that strategic investments, per se do not require any day today monitoring as they are inherently long term in nature. No expenditure on day- to-day basis is incurred for managing those investments. Therefore, strategic investment should be excl .....

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..... 4A of the Act." 4. The Ld. A.R. of the assessee has further brought our attention to the decision of the Hon'ble Bombay High Court in the case of "CIT, Panaji, Goa vs. Phil Corpn. Ltd." (2011) 202 Taxman 368 wherein the Hon'ble Bombay High Court has held that where the investment in shares of sister/subsidiary company is made to have control over that company and further that such an investment was accordingly part of the business of the assessee, in that event the assessee is entitled to deduction of interest paid on the borrowed amount under section 36(1)(iii) of the Act. We, further find that recently the Hon'ble Delhi High Court in the case of "Eicher Goodearth Ltd. vs. CIT" (2015) 60 taxman.com 268 (Del.) has held that if the expendit .....

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