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TMI Blog2018 (7) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of Rs. 1,18,42,528/- given by the assessee. 2. That on the facts and circumstances of the case & in law, the Ld. CIT(A) has erred in deleting the disallowance of Rs. 1,82,26,810/- made u/s 14A r/w rule 8D of the Act. 2. With respect to ground no.1, it was submitted by the learned Authorized Representative for the assessee that the Assessing Officer recorded the assessment order that the assessee has given interest free loans and advances against projects/properties, amounting to Rs. 9,86,87,741/- which is outstanding since long time. It was further the case of the Assessing Officer that the amount of Rs. 9,86,87,741/- were advanced, on which, the assessee had paid substantial interest of Rs. 3,34,46,806/- after capitalization of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's own case for assessment year 2010-11. This Tribunal decided this issue by observing as under: "10. We have heard both the parties and perused the records and case laws cited before us. We find that assessee company has not advanced any business advances during the year and the said advances are appearing as opening balance as on 1.4.2009 as well as closing balance on 31.3.2010 and therefore there cannot be any disallowance of interest expenses u/s 36(l)(ii). The assessee company is regularly assessed u/s 143(3) and was also assessed u/s. 143(3) for A.Y. 2009-10 accepting the returned income in which there were exactly same business advances amounting to Rs. 12,35,98,991/-. AO has neither considered any notional interest income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt ii) Godfrey Philips India Ltd. Vs. Addl.CIT(ITATMum) 2012 (12) TMI 865 iii) Pleasure Trading (P) Ltd. vs. DCIT (ITAT Mum) dt. 03.08.2012. The CIT(A) further given a finding that the assessee company had received much more interest free trade advances/unsecured loans as comparison to interest free trade advances given. Assessee company has not given any interest free trade advances to any parties out of borrowed funds. Thus there is no nexus between borrowed funds and trade advances given to parties. Therefore, there is no question of disallowance of interest/addition on account of notional interest income amounting to Rs. 1,48,31,879/- on trade advances. Thus the CIT(A) has rightly deleted the addition of Rs. 1,48,31,879/- on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licability of Section 14A of Income-tax Act, 1961 (hereinafter referred to as "the Act"), 1961 in respect of assessee company. In response to the same assessee filed reply vide letter dated 29.10.2014 which reads as under: "Assessee has received share of profit (exempt u/s 10(2A)) from partnership firm amounting to Rs. 3,59,96,143/- and disallowed a sum of Rs. 11,161/- u/s 14A in the computation of income. A detailed note on the applicability of sec. 14A is also enclosed as annexure-2." The reply of the assessee has been duly considered and has not been found to be acceptable because of the reason that Section 14A of the I T. Act provides that for the purpose of computing the total income no deduction shall be allowed in respect of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT(A), thus, wrongly deleted the addition made by the Assessing Officer. 3.3 On the other hand, the learned Authorized Representative has drawn our attention to the paper book where the assessee has submitted that the investment made in joint venture is not resulted in the exempt income and, further, the case of the assessee is required to be considered in view of the judgment of Special Bench, ITAT (Delhi) in the case of ACIT Vs. Vireet Investment, ITA No. 502/Del/2012, dt. 16.06.2017. Further, it was submitted that this aspect has duly been considered by the learned CIT(A) and, therefore, the assessee is entitled to relief on merit. He also relies on the following decision: 1. Maxopp Investment Ltd. Vs. CIT [2018] 402 ITR 64 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfaction as required in law. Therefore, in our opinion, the finding recorded by the learned CIT(A) is without any merit and perverse, therefore, the same is required to be reversed. As the learned CIT(A) has not decided the issue on merit, after allowing the claim of the assessee based on non-recording of the satisfaction, therefore we deem it appropriate to remand the matter back to the file of the learned CIT(A) to decide the issue on merit after considering the judgment of the Hon'ble Supreme Court in the case of Maxopp Investment Ltd. (supra) and the judgment of Special Bench, ITAT, Delhi in the case of Vireet Investment (Supra) and other applicable judgments. 4. In the light of the above, the appeal of the Revenue is allowed partly f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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