9911796707
TMI Blog2019 (11) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... the income tax act on account of interest. With respect to the disallowance of expenditure at the rate of 0.5% assessee has received dividend only on the investment of INR 800,000 from the company. As in case of ACB India Ltd vs Asst Commissioner of income tax [ 2015 (4) TMI 224 - DELHI HIGH COURT ] held that the value of investment for working out average value of investment, only those investments are required to be taken from which the assessee has earned exempt income during the year. In the present case the assessee has earned exempt income only from the investment of INR 800,000 which is outstanding at the beginning of the year ended the close of the year. AO is directed to delete the disallowance on account of the interest e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Jain, CA For the Revenue : Ms. Rinku Singh, SR. DR ORDER PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by India Mahagun India Private Limited (The Assessee ) against the order of The Learned Commissioner Of Income Tax (Appeals) XXVI, New Delhi [ The LD CIT (A) ] dated 27/10/2016 for assessment year 2013 14 wherein the assessee has challenged the addition confirmed by the learned CIT A with respect to disallowance u/s 14 A read with rule 8D of ₹ 2852029/ and ad hoc disallowance at the rate of 10% out of the vehicle repair and maintenance expenditure of ₹ 400449/ and consequent depreciation on the car of INR 293603/ . 2. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned assessing officer rejected the explanation of the assessee as not satisfactory. According to him the borrowed funds have been utilised for making investment in equity shares and mutual funds during the year as it is a fact on record that the assessee company has incurred financial charges and availed borrowed funds. He also held that some expenses might have incurred by the assessee. Accordingly, he worked out disallowance under rule 8D of The Income Tax Rule and disallowed interest expenditure of ₹ 2246245/ . He further considered 0.5% of the average value of the investment of ₹ 2852029/ as the investment as at the beginning of the year was ₹ 114992691/ and at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance the assessee has only received dividend from Mahagun real estate Ltd where the investment is only INR 800,000 and therefore expenditure should also be worked out at the rate of 0.5% on the above sum. HE referred to judicial precedent of Hon Delhi High court for supporting this contention. 6. The learned departmental representative vehemently supported the orders of the lower authorities and submitted that the above disallowance has been correctly worked out by the learned CIT A and therefore same should be upheld. 7. We have carefully considered the rival contention and perused the orders of the lower authorities. Undoubtedly the assessee has earned any exempt income of RS . 55 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat section to the extent of 0.5% of INR 800,000 only. Accordingly the orders of the lower authorities are set aside to that extent. In the result the ground number 2 of the appeal of the assessee is partly allowed. 9. The ground number 3 relates to the disallowance of ₹ 2560771/ being 10% of the vehicle repairs and maintenance expenditure. The learned assessing officer noted that assessee has incurred the sum of INR 4004492/ out of vehicle running and maintenance expenditure and INR 2936030 on account of the depreciation on motor cars respectively. He further noted that the directors of the company does not own any personal vehicles and not they have offered any amount of revenue as perquisites it in their hands on ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
