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TMI Blog2015 (1) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... .2155/Mum/2013 - - - Dated:- 21-1-2015 - SHRI R.C.SHARMA, AM SHRI SANJAY GARG, JM Assessee by : Shri Sanjeev Lalan Revenue by : Shri Premanand J. O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the assessee against the order of CIT(A), dated 10-12-201228-3-2013 for the Assessment Year 1999-2000, in the matter of order passed u/s.143(3) of the I.T. Act, wherein following grounds have been taken by assessee :- 1. 1) a) The learned Commissioner of Income Tax (Appeals) [CIT(A)] erred in facts and law in upholding the disallowance of short term capital loss made by the Assessing Officer (AO) of ₹ 23,49,015/- u/s. 94(7). b) The learned AO erred in law in appreciating that the concept of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffered to tax in the revised computation of total income. The details of the same are as under:- Disallowance of short term loss u/s 94(7) 23,49,015/- Penalty 71,052/- Disallowance of Provision for MTM loss 5,29,000/- TOTAL 29,49,067/- 3. The first grievance of the assessee relates to confirming disallowance of short term loss of ₹ 23,49,015/- u/s.94(7) of the Act. 3.1 During the course of assessment proceedings, while compiling the various details for assessment, the assessee found that the provisions of section 94(7) were getting attracted in the present facts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e back to the file of Assessing Officer with a direction to first find out whether any record date is involved and then decided the issue as per law. As the facts and circumstances during the year under consideration are pari materia, where the assessee has earned income under various schemes but not recorded any finding as to whether any record date was involved or not and the lower authorities has decided the issue on assuming that there is a record date in these schemes. Following the order of the Tribunal, as discussed above, we restore this issue back to the file of the AO with a direction to first find out whether any record date is involved and then decide the issue afresh as per law. 4. With regard to disallowance u/s.14A, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant partially that the borrowed funds were utilized for the business purpose and accordingly did not make any disallowance of interest u/s.14A. The AO has invoked the provisions of section 14A and applied the formula as prescribed under Rule 8D of the Income Tax Rules following the decision in the case of Godrej Boyce (Bom. High Court) and made the disallowance of ₹ 94,09,045/- u/s.14A by calculating 0.5% of the average investments, from which income earned is exempt. 4.2 By the impugned order, the CIT(A) confirmed the disallowance, against which assessee is in further appeal before us. 4.3 We have considered rival contentions and found that assessee has made investment in subsidiaries as a strategic investment and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from which does not form or shall not form part of the total income as appearing in the balance sheet as on the first day and in the last day of the previous year . The Assessing Officer was wrong in taking into consideration the investment of ₹ 103 crores made during the year which has not earned any dividend or exempt income. It is only the average of the value of the investment from which the income has been earned which is not falling within the part of the total income that is to be considered. Thus, it is not the total investment at all beginning of the year and at the end of the year, which is to be considered but it is the average of the value of investments which has given rise to the income which does not form part of the to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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