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TMI Blog2018 (2) TMI 1974X X X X Extracts X X X X X X X X Extracts X X X X ..... and there is no need to interfere with the same. Therefore, the appeal filed by the Revenue is dismissed. - ITA No. 810/DEL/2015 - - - Dated:- 22-2-2018 - Shri R. K. Panda, Accountant Member And Ms Suchitra Kamble, Judicial Member Appellant by Sh. Atiq Ahmad Sr. DR Respondent by Ms. Sana Bajaj, CA ORDER Suchitra Kamble This appeal is filed by the Revenue against the order dated 05/11/2014 passed by CIT (A)-XVII, New Delhi for Assessment Year 2010-11. 2. The grounds of appeal are as under:- 1. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in restricting the disallowance of ₹ 53,49,000/- made by A.O to ₹ 12,50,000/- u/s 14A. 2. On the facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- as expenditure attributable to exempt income. As relates to claim under Section 36(1)(iii) of the Act, the Assessing Officer observed that the assessee company used substantial amount of funds as investments i.e. a purpose other than its business. Therefore, the amount of funds as interest paid on account of funds utilized as investments was considered as expense not eligible to be allowed u/s 36(1)(iii) of the Act. Thus, the Assessing Officer disallowed ₹ 22,87,000/- as excessive interest payment to the tune of ₹ 22.87 lac by the company on account of funds not utilized for the purpose of earning taxable business income. 4. Being aggrieved by the said order, the assessee filed appeal before the CIT(A). The CIT(A) partly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estments therefore 8D(ii) is Nil. Since the appellant has some exempt income therefore only 8D(iii) would be applicable. The appellant has itself calculated ₹ 12.5 lakhs as disallowance u/s 14A. 6.15. Since the appellant has not given any details of direct expenses incurred for earning exempt income, the only option is to take the option of 0.5% of average value of investments. Therefore the made under Rule 8D(2)(iii) is sustained. The ground of appeal is ruled partly in favour of the appellant. As regards the Ground No. 2, the CIT(A) held as under: 7. Ground No. 3 is in respect of disallowance of interest expenses u/s 36(i)(iii). 7.1. As per section 36(l)(iii): 36. Other deductions.-(1) The deductions provided for in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 22,87,000/- is deleted. The ground of appeal is ruled in favour of the appellant. The assessee has proved that all the scripts were held as stock in trade and there was no investment, therefore, Rule 8D will not be applicable in the present case. From the records, it also reveals that the same is just and proper as related to disallowance of interest expenses u/s 36(1) (iii) interest on funds utilized in buying securities for earning exempt income is not there in the Income Tax Act only interest is paid for a funds for non business purposes can be disallowed. Thus, the CIT(A) has given a detailed finding and there is no need to interfere with the same. Therefore, the appeal filed by the Revenue is dismissed. 8. In result, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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