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TMI Blog2021 (2) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... for period of 36 months. CIT(A) held that in view of decisions of ACB India Ltd. Vs. ACIT [ 2015 (4) TMI 224 - DELHI HIGH COURT] and CIT(A) vs. Holcim India [ 2014 (9) TMI 434 - DELHI HIGH COURT] claim of deduction under Rule 8D(2) (ii) was upheld. CIT(A) further observed that claim of deduction of ₹ 3,71,603/- u/s 37(1) on interest paid to HP Financial Services (India) Pvt. Ltd. for taking IT equipment on financial lease for period of 36 months being specific purpose borrowings as treated under Rule 14A read with Rule 8D(2)(ii). Thus, CIT(A) made total disallowance u/s 14A read with Rule 8D accordingly. Thus, Ground No. 1 of Revenue s appeal is dismissed. Addition u/s 37 - expenses in connection with new line of business - A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent by : Sh. Rohit Jain, Adv Ms. Somya Jain, Adv ORDER PER SUCHITRA KAMBLE, JM This appeal is filed by the Revenue against order dated 21/09/2017 passed by CIT(A)-38, Delhi for assessment year 2012-13. 2. The grounds of appeal are as under:- 1. On the facts and under the circumstances of the case, the Ld.CIT(A) has erred in restricting the disallowance u/s 14A r.w.r. 8D from ₹ 14,61,04,401/- to ₹ 81,79,623/- by accepting the assessee s revised computation of income based on afterthought, whereas the AO had made the addition u/s 14A on the basis of disallowance u/s 14A r.w.r 8D as arrived by the Tax Auditor of the assessee as reflected in Tax Audit Report submitted by the assessee along with its return o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of investments amounting to ₹ 134,546,381/-. The Assessing Officer rightly observed that the assessee company invested in equity and preference shares as well as in trade investments and mutual funds. One income from trade investments and mutual funds has been offered as business income and taxed under the head PGBP. Besides interest expenses, the assessee company is incurring various expenses which also have a bearing on the investments made by the assessee company. Therefore, Assessing Officer rightly rejected the claim of revising the computation of 14A disallowance read with Rule 8D is therefore, rejected. The assessee has not revised its income tax return. The claim was filed during the course of assessment proceedings. The tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) further observed that claim of deduction of ₹ 3,71,603/- u/s 37(1) on interest paid to HP Financial Services (India) Pvt. Ltd. for taking IT equipment on financial lease for period of 36 months being specific purpose borrowings as treated under Rule 14A read with Rule 8D(2)(ii). Thus, CIT(A) made total disallowance u/s 14A read with Rule 8D at ₹ 78,08,020+ ₹ 3,71,603/-= 81, 79,623/-. These were the contentions before CIT(A). The CIT(A) has verified all the observations. Thus, Ground No. 1 of Revenue s appeal is dismissed. 8. As regards Ground No. 2, the Ld. DR submitted that in respect of the expenses in connection with new line of business, the assessee debited the said expenses to the Profit and Loss accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te and secretarial affairs to its subsidiary companies upto 30th September, 2011. The said services were ceased to render by the assessee company w.e.f. 30.09.2011 because the assessee company sought banking license in October, 2011 and the pre-condition for applying for banking license is that the applicant should be a non-operating company. The fact remains undisputed that out of total lease rental expense of ₹ 52,79,02,826/- which was incurred during the present assessment year was recovered by the assessee company from the subsidiary company amounting to ₹ 47,59,99,859/- and balance amount was incurred by the assessee towards rendering support service to subsidiaries companies. Further, the assessee company also incurred ren ..... X X X X Extracts X X X X X X X X Extracts X X X X
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