9911796707
TMI Blog2016 (12) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... d with rule 8D of the Income Tax Rules, 1962. 3. Brief facts of the case are that the assessee filed his return of income on 30.9.2010 declaring total income of Rs. 37,67,935/-. The case of the assessee was selected for scrutiny under the CASS and accordingly statutory notices under section 143(2) and 142(1) were issued and served upon the assessee. The assessment was framed by the AO vide order dated 1.3.2013 passed under section 143(3) of the Act at Rs. 54,46,350/- by making various additions including of Rs. 16,29,409/- under section 14A comprising Rs. 15,37,367/- under rule 8D (2)(ii) and Rs. 92,042/- under rule 8D(2)(iii). During the course of assessment proceedings, the AO noticed that the assessee has earned dividend income of Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the investments were from the interest-free funds available. The relevant finding here is that there should be availability of interest-free funds to the assessee and that such interest-free funds has not already been utilized for any other purpose. Hence, in my opinion, it is incumbent upon the assessee to show that the interest-free funds were available with him for making the investments in shares/mutual funds, income from which is/would be exempt from tax. 2.6 Perusal of the balance sheet filed by the assessee at 31.03.2009 shows that the assessee had balance in the capital account of Rs. 3.32 crores. The asset side shows fixed deposits with Bank of India of Rs. 2 crores, flat and office premises of Rs. 23.22 lakhs, gold and jewellery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D(2)(ii) is upheld. Subject to the verification of the contention of the assessee that while calculating the disallowance, the A.O. took wrong figurers of average of total assets. The A.O. is directed to verify the correctness of the working of the figures of average of total assets and adopt the correct figure for working out the disallowance. 2.7 As regards the contention of the assessee that the net interest expenditure should be considered for working out of the disallowance on account of proportionate interest expenses, I do not find the same acceptable. The decision in the case of Morgan Stanley relied upon by the assessee relates to the A. Ys. 2001-02 and 2004-05 when Rule 8D was not on the statute. The present appeal relates the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT V/s HDFC BANK LTD. [2014] 366 ITR 505 (Bom) and the decision Commissioner of Income-tax V/s SBI DHFL Ltd. 2015. (2015) 93 CCH 0201( MumHC) and submitted that since the assessee's own funds are more than the investment made in the shares and securities and therefore no disallowance under rule 8D(2)(ii) of Rs. 15,37,367/- to be made. The ld. AR, however, did not object to the addition of Rs. 92,042/- made under rule 8D(2)(iii). The ld. AR finally prayed that the disallowance of Rs. 15,37,366/- under rule 8D(2(ii) be deleted as the case of the assessee is fully covered by the decision of the Jurisdictional High Court. On the contrary, the ld.DR strongly objected to the arguments of the ld.AR and pointed out that the ld.CIT(A) i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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