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TMI Blog2017 (7) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... n nature is correct one. Even otherwise, the assessee has been making such payment from AY 1999-2000 onwards, which have been accepted as revenue in nature by the Department in the earlier years - Decided in favour of assessee Disallowance u/s. 14A - Held that:- Calculations / quantifications needs to be examined at the level of the AO, because Ld. CIT(A) has not given any chance to the AO for making such calculations/ quantifications which in the interest of justice is very essential. Accordingly, in the interest of justice, we set aside the issue in dispute to the file of the AO for fresh consideration and decide the same in view of the law laid down by the Hon’ble Delhi High Court in its decision dated 2nd September, 2015 in the case of Cheminvest Ltd. vs. Commissioner of Income Tax (2015 (9) TMI 238 - DELHI HIGH COURT). - ITA No. 2588/Del/2013 - - - Dated:- 13-12-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER, AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER For The Department : SH. UMESH CHANDER DUBEY, SR. DR For The Assessee : SH. R.K. KAPOOR, ADV. ORDER PER H.S. SIDHU, J.M. The Department has filed the Appeal against the impugned order dated 28.2.2013 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that Ld. CIT(A) has passed a well reasoned order which does not need any interference on my part, hence, the same may be upheld and accordingly, the appeal of the Revenue may be dismissed. 7. We have heard both the parties and perused the records, especially the impugned order passed by the Ld. CIT(A). We find that Ld. First Appellate Authority has elaborately discussed the issues in dispute by considering the submissions of the assessee and adjudicated the issue No. 1 vide para no. 6.2 at page no. 6 to 9 of the impugned order. The said relevant paras are reproduced as under:- 6.2 Regarding the Ground NO.1 of the appeal relating to treatment of the technical fees paid to M/s Mahindra Mahindra for use of design, drawing production tooling for manufacturing of independent front suspension for Scorpio Car as capital in nature, the appellant claims that the above expenses were revenue in nature, which were paid to M M for the purpose of use of prototype tooling developed by M/s Samlip for M M, which was the sole property of M M. in this regard my attention was drawn to the Tripartite agreement dated 21 Marcy, 1998 amongst the appellant (then called as Korin ), M/s Samlip an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at any time for any purpose other than the purpose of this agreement. Perusal of the Agreement dated 21 March, 1998 clearly show that development of drawing, which is main product of the prototype agreement is clearly shown to be property of MIs Mahindra Mahindra {M M}. Further, the agreement clearly provides that in terms of the agreement, design and drawing taken into manufacturing of the products, and the related documents shall be handed over to M/s Mahindra Mahindra on termination of the agreement. Keeping in view the same, it is evident that the appellant company was given only limited rights by M M to use the prototype tooling and drawing developed by M/s Samlip by M M for which purpose the payment was paid by MIs M M to the said M/s Samlip in lieu of which payment of technical fee to MIs Mahindra Mahindra was made for the purpose of manufacturing the IFS system for M/s Mahindra Mahindra. It is obvious that the appellant company, being auto part manufacturer for M/s Mahindra Mahindra is solely dependent upon the business given to it by M/s Mahindra Mahindra. In view of the required modernization in the IFS system, the said M/s Mahindra Mahindra made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reproduced hereunder:- 6.3 Regarding ground No. 2 of the appeal, I find that there is no dispute that Rule 8D ought to have been applied for working out of disallowance under section 14A. The only dispute is with respect to calculation therein, particularly in respect of Rule 8D(2)(ii). The appellant had submitted that the company has significant own funds available with it. On the basis of a day-to-day availability of cash flow fn the CC account, the appellant furnished working before me that out of the-total investment of ₹ 20 crores, in respect of investment of 9.72 crores, the appellant had realized adequate income from sales to cover such borrowing on the same day and hence the contention that no interest ought to have been charged for such investments is found to be correct. Similarly, the appellant's contention that for making investment on different dates aggregating to RS.8.63 crores, the debit balance in the CC account was duly squared up within 2 days on receipt of income from sale, is also found to be correct on perusal of such cash flow statement. The assessee accordingly made additional disallowance before me of further amount of ₹ 61,271/- in r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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