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TMI Blog2014 (1) TMI 1851X X X X Extracts X X X X X X X X Extracts X X X X ..... trial Products P. Ltd for assessment year 1989-90 in which identical issue was decided in favour of assessee and against the revenue Disallowance u/s. 14A on account of interest and for administrative expenses - Held that:- There was no increase in borrowing rather there was reduction in total debts. The law is now settled that no disallowance u/s. 14A can be made of interest expenses until there is finding of AO that borrowed funds were utilized by assessee to earn exempt income. Therefore we find no infirmity in the order passed by CIT(A) in deleting the addition made by AO out of interest payment u/s. 14A. As regards disallowance of ₹ 1,00,000/- out of administrative expenses made by AO u/s. 14A CIT(A) has restricted this disallowance to ₹ 50,000/- which also does not require any interference on our part as it appears to be reasonable in the facts of this case. This ground of revenue’s appeal is also dismissed. - ITA No. 198/Ahd/2013 - - - Dated:- 31-1-2014 - Sri D.K Tyagi, Judicial Member and Shri T.R.Meena, Accountant Member For the Appellant : Sri K.C. Mathews, Sr.D.R. For the Respondent : Sri U.S. Bhatti, A.R. ORDER PER : D.K. TYAGI, JUD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilar law has been laid down by the Hon'ble ITAT Ahmedabad in the case of DCJT vs Amarshiv Construction Pvt Ltd reported in 88 ITO381. 4. In the first inning the Hon ble ITAT vide its order dated 30-08-2011 restored the matter back to the file of Ld. CIT(A) with following direction:- 5.2. In the instant case before us, the Ld. CIT(A) did not analyse the relevant terms and conditions of various contracts in relation to retention money nor recorded his specific findings as to the method of accounting regularly followed by the appellant. As is apparent the impugned order suffers from lack of reasoning and is not a speaking order. The Ld. CIT (A) without going into the terms and conditions of the relevant contracts, merely upheld the findings off the A 0. In view of the foregoing, especially when the Ld CIT(A) has not analysed the relevant terms and conditions of the contracts in relation to retention money we consider it fair and appropriate to set aside the order of the Ld CIT(A) and restore the matter to his file for deciding the issues raised in ground No.1 afresh in accordance with law in the light of various judicial pronouncements including those referred to above, af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound that there was no such change during the year under appeal and whatever retention money has not been shown in this year and realized in the subsequent year has been shown as sale proceeds in that year and offered for tax. He therefore was of the view that there was no need to disturb the method of accounting followed by assessee-company and also found no discrepancy in terms and conditions of purchase orders. Ld. CIT(A) has also analyzed the case laws relied by the AO and also that of assessee and found that reliance placed by AO on certain case laws was misplaced as they do not apply to the facts of assessee s case. On the other hand, he followed Hon ble Supreme Court decision in assessee s sister concern, namely Apollo Industrial Products P. Ltd for assessment year 1989-90 in which identical issue was decided in favour of assessee and against the revenue. We are therefore not inclined to interfere with the order passed Ld. CIT(A) on this issue and the same is hereby upheld. This ground of revenue s appeal is dismissed 7. Ground No. 2 relates to addition of ₹ 27,36,668/- u/s. 14A on account of interest and ₹ 1,00,000/- for administrative expenses. The observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough the facts of the case. We find that neither before the A.O nor before the ld. CJT(A), the appellant furnished details and evidence that funds borrowed by it were utilized for the purpose of their business alone and not by way of investments in equity shares/mutual funds. Resultantly, the A.O made an estimated disallowance of interest on borrowed funds and out of administrative expenses, following his order for the preceding year. The issue in the preceding year has now been restored to the file of the A.O by the ITAT in their aforesaid decision dated 8./10/2010. However, subsequently few more decisions have been rendered on the issue, which according to the ld. AR need to be considered. We notice that the ITAT vide their order dated 16.1.2009 in the A.Y. 2003-04 in ITA Nos. 1343/AHD/2006 and 1503/AHD/2006 in the appellant's own case restored this issue to the file of A O for working out the disallowance in the light of provisions contained in sub-sections 2 3 of section 14A inserted by Finance Act 2006 read with Rule 8 of income Tax Rules, 1962. The ITAT merely followed the view taken by the Special bench of ITAT Mumbai in the case of ITO vs. Daga Capital Management (P) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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