9911796707
TMI Blog2019 (9) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... e is set aside by the Tribunal in quantum appeal. Disallowance u/s.14A r.w.Rule 8D(ii) and disallowance u/s.14A r.w.Rule 8D(iii) - HELD THAT:- CIT(A) has rightly relied on the decision in the case of HDFC Bank Ltd. [ 2014 (8) TMI 119 - BOMBAY HIGH COURT ] has held that in case the interest free funds available with the assessee are more than the investments in the securities yielding exempt income then the presumption has to be drawn that investments are made out from interest free funds and not out of interest bearing funds. Similarly, on the issue of disallowance under rule 8D(2)(iii), the CIT(A) rightly observed that the disallowance cannot exceed the expenses incurred by the assessee. Hence, we uphold the order of Ld.CIT(A) in this rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... And Shri Abhirama Kartikeya ORDER PER RAJESH KUMAR, A.M: These appeals filed by the Revenue are directed against the order(s) of the Commissioner of Income Tax(Appeals)-10, Mumbai for the AYs.2009-10 and 2012-13. Assessee filed Cross-Objection against the appeal of Revenue for the AY.2009-10. ITA No.2769/Mum/2017 (AY.2009-10): 2. The only issue raised by the Revenue in the present appeal is against the order of Ld.CIT(A) being perverse in directing the AO to withdraw the penalty levied on the issue of concealment of income u/s 271(1)(c) of the Act in view of the fact that the Tribunal has only set aside the issue to the file of AO. 3. We have heard the rival submissions of both the parties and perused the material on record including the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , I direct the AO to withdraw the penalty levied on this issue. However, he is at liberty to levy the penalty if he again decides the issue against the appellant and finds that there is a concealment of income. 3.1. We, therefore, do not find any reason to interfere with the order of Ld.CIT(A) in this regard and accordingly we uphold the same by dismissing the appeal of Revenue for the AY.2009-10. 4. The assessee in its Cross-Objection No.249/Mum/2018 for the AY.2009-2010, has challenged the penalty proceedings initiated u/s.274 r.w.s.271(1)(c) of the Act on the ground that the AO has not specified one of the two limbs under which the penalty proceedings has been initiated. 5. Since we have already dismissed the appeal of Revenue for the AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss account were only ₹ 81,086/- and all these were not connected with the earning of exempt income and thus AO mechanically applied the provisions of rule 8D(2)(iii). The AO by rejecting the contentions of the assessee calculated the disallowance, by applying 0.5% on the average investments, at ₹ 3,90,430/- by ignoring the fact that in any case the disallowance cannot exceed the actual expenses which is ₹ 81,086/-. 8. In the appellate proceedings, Ld.CIT(A) allowed the appeal of the assessee by holding that so far as disallowance u/s.8D(2)(ii) is concerned, the assessee s own funds were far more than the investments made by the assessee in the share/securities yielding tax free income, therefore, the presumption is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds Nos.1 2. 10. The issue in Ground Nos. 3 4 raised by the Revenue is against the order of Ld.CIT(A), rejecting the disallowance u/s.36(1)(iii) of the Act of ₹ 2,94,49,546/- as against the total disallowance of ₹ 21,34,52,880/- made by the AO u/s.36(1)(iii) of the Act. 10.1. Facts in brief are that during the year the total borrowing as on 31-03-2012 was at ₹ 53.48 crores whereas the total loans and advances to various parties were of ₹ 70.33 crores. The assessee was engaged in the business of dealing in shares and securities. The assessee paid interest on the total borrowings to the tune of ₹ 25,42,10,340/- and also received interest income of ₹ 3,21,47,940/-. The AO observed that since the interest expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds diverted for non-business purposes. The ld.AR on the other hand has worked out the interest diverted for non-business purposes at ₹ 2,94,49,546 and requested to consider only this amount for disallowance u/s 36(1)(iii) of the Act. I consider the working at page-58 of the paper book, volume.2 as reasonable and direct the AO to adopt the same for the purpose of disallowance u/s 36(1)(iii) of the. Act. However, the AO is at liberty to verify the correctness of the working and the method adopted. The appellant is hereby directed to supply this working to the AO at the time of giving effect to this order. The ground is allowed accordingly. 12. Ld. DR vehemently submitted before us that the CIT(A) has set aside the issue to the file of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
