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TMI Blog2015 (7) TMI 1202X X X X Extracts X X X X X X X X Extracts X X X X ..... ther infrastructure projects directly or indirectly through special purpose vehicle. The AO has completed the assessment at an income of Rs. 56,91,500/- against the returned loss of Rs. 12,16,883/- after making various additions/disallowances. Being aggrieved with the above additions, this appeal has been filed in which it has been contended that (i) The AO has not followed the principles of natural justice and the order passed by him u/s 143(3) is arbitrary. (ii) Disallowance of expenses at Rs. 30,377,148/- claimed by the appellant as business expenditure is not in order. (iii) Initiation of proceedings u/s 271(1)(c ) is against law and facts. 2.1. During appeal proceedings the appellant has filed an application under rule 46A subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business is accepted. 3. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of hearing of the appeal." 4. We have heard Ms.Y.Kakkar, Ld.D.R. on behalf of the Revenue and Dr.Rakesh Gupta, Ld. Advocate on behalf of the assessee. 5. The Ld.D.R. relied on page 2 last para of the assessment order and submitted that 91% of the total funds available were invested by the company in equity shares of the Associated Companies/SVPs. She submitted that the First Appellate Authority has not examined the papers and has unjustly reversed the order of the Assessing Officer. On S.14A she submitted that it is a subject matter of appeal and the First Appellate Authority had considered this Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in question under the head 'income from business'. He pleaded that Rule of Consistency should be followed as was done by the Ld.CIT, D.R. For this purpose he relied on the judgement of Hon'ble Supreme Court in the case of Excel Industries Ltd. reported in 358 ITR 295(SC). On the issue of disallowance u/s 14A, he submitted that the A.O. had intended to make a disallowance u/s 14A but the assessee had made detailed submissions as to why the disallowance should not be made u/s 14A. He drew the attention of the Bench to the letter dt. 18th October,2011 para 11 and submitted that, the A.O. on getting convinced with these submissions of the assessee, has not made any disallowance u/s 14A. He submitted that all the investments in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to develop power and other infrastructure projects, either directly or indirectly, through special purpose vehicles (SVPs) by participating in the equity share holding and management of the project companies. The First Appellate Authority has on the ground of consistency allowed the claim of the assessee. We find no infirmity in this order of the Ld.CIT(A). Hence we uphold the same and dismiss this ground of Revenue. 9. This brings us to the ground of disallowance u/s 14A. The A.O. has not made disallowance u/s 14A. The case of the Revenue is that the Ld.CIT(A) ignored the provisions of S.14A of the Act in the appellate proceedings. 10. Admittedly the assessee is in the business of setting up of power projects by entering into joint ven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing exempted income. Under the circumstances, Ld.CIT(A) is correct in holding that disallowance of a further sum of Rs. 40,556/- calculated @ 2% of the dividend earned is sufficient. Under the circumstances, Ld.CIT(A) is correct in holding that disallowance of a further sum of Rs. 40,556/- calculated @ 2% of the dividend earned is sufficient. Under the circumstances we do not find any infirmity in the order of the Ld.CIT(A), hence we uphold the same. On going through the above observations we are of the view that this is merely a question of fact and does not involve any question of law much less a substantial question of law, as the Tribunal held that the expenses which have been claimed by the assessee were not towards the exempted inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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