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TMI Blog2020 (11) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... of the fact that the assessee did not consider share application money at the year-end as investment yielding exempt income, which the AO took it otherwise. It is found that similar issue came up for consideration before the Tribunal in case of the assessee for the assessment year 2009-10. A copy of such order has been placed on record. Tribunal has decided this issue in assessee s favour. Similar view has been reiterated by the Tribunal in its order for the assessment year 2010-11, whose copy has also been placed in the paper book. DR could not point out if the view of the Tribunal in such earlier years has been reversed or modified by the Hon ble High Court in any manner. Respectfully following the precedent, we set-aside the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER Assessee by Shri Nikhil Pathak Revenue by Shri S.P. Walimbe ORDER PER R.S.SYAL, VP : This appeal by the assessee is directed against the order dated 15-03-2017 passed by the Commissioner of Income-tax (Appeals)- 7, Pune in relation to the assessment year 2012-13. 2. The first ground is against the confirmation of addition of ₹ 5,64,264/- on account of bank interest on deposits not belonging to the assessee. 3. At the very outset, the ld. AR fairly submitted that this issue is covered against the assessee by the Tribunal order passed in the case of the assessee for the immediately preceding assessment year. Inviting our attentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... court and gone through the relevant material on record, it is found that the AO computed the amount otherwise disallowable u/s.14A read with Rule 8D at ₹ 12.97 crore. On the other hand, the assessee suo moto offered disallowance of ₹ 12.26 crore. The difference of ₹ 71,18,316/- emanated on account of the fact that the assessee did not consider share application money at the year-end as investment yielding exempt income, which the AO took it otherwise. It is found that similar issue came up for consideration before the Tribunal in case of the assessee for the assessment year 2009-10. A copy of such order has been placed on record. The Tribunal on page 114 of the paper book has decided this issue in assessee s favour. Simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that where an assessee possessed sufficient interest free funds of its own which were generated in the course of relevant financial year, apart from substantial shareholders funds, presumption gets established that the investments in sister concerns were made by the assessee out of interest free funds and, therefore, no part of interest on borrowings can be disallowed on the basis that the investments were made out of interest bearing funds. In reaching this conclusion, the Hon ble High Court relied on the judgment of the Hon ble Supreme Court in the case of East India Pharmaceutical Works Ltd. Vs. CIT (1997) 224 ITR 627 (SC). Similar view has been taken by the Hon'ble Dehi High Court in CIT vs. Tin Box Company (2003) 260 ITR 637 (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have examined the assessee s calculation of disallowance u/s.14A for the year under consideration. It can be seen that the assessee offered disallowance of interest u/s.14A r.w. Rule 8D at ₹ 11.69 crore. Thus, it is evident that the amount of shareholders fund available with the assessee at the beginning of the year was not claimed to have been utilized doubly by the assessee once for the purpose of avoiding disallowance u/s.14A and secondly, for claiming allowance of deduction of interest u/s.36(1)(iii). The assessee claimed it only once, that is, for claiming deduction of interest u/s 36(1)(iii) of the Act. Had the assessee claimed the benefit of utilization of shareholders fund for avoiding disallowance under section 14A and simu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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