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TMI Blog2017 (2) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. CIT(Appeals) giving relief to the assessee - Decided against revenue Disallowance made by the Assessing Officer on account of proportionate interest under Rule 8D(2)(ii) deleted - Decided against revenue - I.T.A. No. 675/KOL/ 2014 - - - Dated:- 3-2-2017 - Shri P.M. Jagtap, Accountant Member and Shri S.S. Viswanethra Ravi , Judicial Member For The Department : None For The Assessee : Shri Bijay Kumar Chaturvedi , A.R. ORDER Per Shri P.M. Jagtap, A.M. . : This appeal is preferred by the Revenue against the order of ld. Commissioner of Income Tax (Appeals)-IV, Kolkata dated 05.12.2013. 2. In Ground No. 1, the Revenue has challenged the act ion of the ld. CIT(Appeals) in deleting the disallowance of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 30,57,783/- was added back in the income on account of disallowance u/s 14A of the Income Tax Act, 1961 which consists of average value of investment as well as other direct expenditure incurred for earning the exempt income. However, the Ld. Assessing Officer further disallowed a sum of ₹ 92,73,089/- on account of proportionate interest. In this connection this may be noted that total investment of the assessee at the beginning of the year was ₹ 94,68,05,193/- and at the end of the year i.e. as on 31.03.09 was ₹ 1,00,70,62,725/-. The assessee has not made any investment out of the borrowed fund on which interest has been charged. The assessee was having sufficient reserve which was ₹ 1,49,09,64,617/- as on 31. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of hearing before us, the ld. D.R. has filed an application seeking adjournment. However, keeping in view the submission made by the ld. counsel for the assessee that both the issues involved in this appeal of the Revenue are squarely covered in favour of the assessee, the request of the ld. D.R. for adjournment is not acceded to and this appeal of the Revenue is being disposed of exparte after taking into consideration the submissions made by the ld. counsel for the assessee as well as the material available on record. It is observed that a similar disallowance on account of proportionate interest expenditure by applying Rule 8D(2)(ii) was made in assessee s case for A.Y. 2008-09 and the order of the ld. CIT(Appeals) deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rowed capital - investments by assessee finding that investments were from interest free funds available with assessee-borrowed capital for the purposes of business- interest deductible under Income Tax Act u/s 36(1)(iii). G.D. Metsteel Pvt . Ltd. vs. - ACIT reported in 142 TTJ 641 (Mumbai Tribunal) Held that the investments are made by the assessee s own funds and have been made in the earlier years, no disallowance u/s 14A is required to be made. The Head Note reads as under: - Business expenditure-Disallowance under section 14A Apportionment of expenditure-When investments are made from own funds, merely because the assessee had to subsequently borrow the funds for business use, it cannot be said that the borrowed fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n hereinabove, we hold that the ld. CIT(A) had rightly deleted the disallowance u/s 14A of the Act in the fact s and circumstances of the case to the tune of ₹ 92,89,825/- . Accordingly, the ground no. 1 raised by the revenue is dismissed . As the issue involved in the year under consideration as well as all the material facts relevant thereto are similar to that of A.Y. 2008-09, we respectfully fol low the decision of the Coordinate Bench rendered in A.Y. 2008-09 and uphold the impugned order of the ld. CIT(Appeals) deleting the disallowance made by the Assessing Officer on account of proportionate interest under Rule 8D(2)(ii). Ground No. 1 of the Revenue s appeal is accordingly dismissed. 7. As regards Ground No. 2 of the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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