9911796707
TMI Blog2017 (9) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of Mr. Malhotra, we have perused that part of the Tribunal's order which disposes of the Revenue's appeal. 3. The Revenue was aggrieved and dissatisfied with the order of the First Appellate Authority. In this case, the assessee is a company engaged in the business of manufacturing and selling of petrochemicals and trading in goods and shares, etc.. During the year under consideration, the assessee had income from business, capital gain and house property. It filed its return of income on 30-9-2009 declaring total income of Rs. 10,04,46,170/. The case was selected for scrutiny. During the assessment proceedings, the Assessing Officer noticed that the assessee has both exempt income yielding investment as well as business assets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .08 crores. This clearly shows that the assessee is having sufficient funds to make investments. These are the assessee's own funds. Further, out of the total investment of Rs. 69.08 crores, Rs. 66.68 crores are invested in subsidiary/associate companies. There is also loan liability of Rs. 25.25 crores as on 31-3-2008 which has come down to Rs. 15.61 crores as on 31-3-2009. Thus, there are no fresh borrowings during the year under consideration. 6. In the circumstances, the order of the Commissioner has not been maintained in its entirety. The Tribunal held that there is no reason for allocation of any interest expenditure towards earning of exempt income. The Tribunal, therefore, has found, on facts, that the Commissioner could not h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd we should admit this appeal. We should not proceed on the footing that the Revenue or the tax impact is meagre and refuse to entertain the appeal, all the more when it involves substantial questions of law. 9. With the assistance Mr. Malhotra, we have perused the order of the Assessing Officer. The Assessing Officer had observed that the working of the disallowance is incorrect. He has worked out the disallowance not only by application of Section 14A of the Act but by Rule 8D of the Rules. In doing so, he has held that the assessee has both exempt income yielding investment as well as business assets in the balancesheet. Once the assessee maintains consolidated accounts, then, the offered amount cannot be accepted. In the opinion of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total investments major amounts are invested in shares of subsidiary/associate companies. They were acquired/allotted for consideration other than cash. 11. Therefore, no disallowance could have been made was the argument before the First Appellate Authority as well. The appellant made a without prejudice offer of Rs. 21,078/being 10% of the dividend income apportioned towards administrative expenses. Therefore, alternatively the disallowance may be restricted to Rs. 2,17,076/. 12. The Commissioner in para 7 of his order considered this stand of the assessee and held that the investments have to be construed as having been made out of the total internal accruals. The argument was termed as reasonable but in the absence of details to prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
