9911796707
TMI Blog2021 (2) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O u/s 14A in accordance with Rule 8D of the Income Tax Rule. 2. In the facts and circumstances of the case, the Ld.CIT(A) has erred in deleting the additions of Rs. 17,39,69,513/- made by AO by disallowing depreciation claimed on Wind Mills by admitting fresh evidence in violation of Rule 46(3) of the IT Rules. 3. In the facts and circumstances of the case, the Ld.CIT(A) has erred in deleting the addition of Rs. 27,83,426/- made u/s 36(1) (iii) by holding that the appellant had borrowed funds which was used for business purposes and was paying interest on these funds." 3. The assessee company is a listed public company incorporated under the Companies Act, 1956 and is registered with the Reserve Bank of India ('RBI') as a Non Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into the Income Tax Act, 1961 vide Finance Act, 2001 with retrospective Application from 1/4/1962. It provides for disallowance of expenditure in relation to income not includible in total income. Over a period of time various High Courts and the Hon'ble Apex Courts have decided this issue. The Ld. DR relied upon the Circular No. 5 of 2014 dated 11th February, 2014 issued by CBDT. The Ld. DR further submitted that the main purpose for which the investment into shares is made by the assessee may not be relating as Section 14A applies irrespective of whether share are held to gain control or as stock-in-trade. Expenditure which is in relation to earning dividends can be disallowed u/s 14A and Rule 8D as held in Apex Court's decision in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the findings of the CIT(A). 7. We have heard both the parties and perused the material available on record. As regards Ground No. 1 of the Revenue's appeal, the assessee made a suo moto disallowance of Rs. 16,05,000/-. The investments were out of assessee's own funds and no borrowed funds were used to acquire investments. There was no interest expenditure which could be directly or indirectly attributable to the exempt income. The CIT(A) further observed that the investments were strategic investment as per the assessee and the same should be excluded for calculating disallowance under Rule 8D. As per Rule 8D(2)(i), the assessee made disallowance of Rs. 16,05,000/- under the head strategic investment and has taken 20% of employee cost ..... X X X X Extracts X X X X X X X X Extracts X X X X
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