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TMI Blog2021 (4) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... I 119 - BOMBAY HIGH COURT] . Thus we hold that no disallowance of interest expense claimed by the assessee can be made on account of investments as discussed above. Administrative expenses disallowance - We find that the assessee has claim to have maintained separate books of accounts and accordingly the assessee has prepared separate income and expenditure account. On perusal of the income and expenditure accounts we find that the assessee has claim only bank charges and demat charges amounting to ₹ 2728.91/- only. As such we find that the assessee has not debited any other expenses in its personal income and expenditure account which the assessee might have incurred in earning such dividend income. Such administrative exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the disallowance of interest expenditure u/s. 14A r.w.r. 8D to the extent of ₹ 4,31,184/- as against the amount worked out by the appellant to the extent of ₹ 42,079/- The appellant being aggrieved, prays that the disallowance of interest made u/s.14A r.w.r 8D to the extent of ₹ 4,31,184/- being unjustified, unwarranted, bad in law and illegal be reduced to ₹ 42,079/- Ground II The appellant craves leave to add, amend, alter and or delete the grounds of appeal. 3. The only issue raised by the assessee is that the ''Ld.CIT (A)'' erred in confirming the disallowance made by the AO for ₹ 4,31,184/- only under the provision of section 14A r.w.r. 8D of Income Tax Rule. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med the order of the AO by observing as under: 6.1 I have gone through the assessment order of the AO and written submissions of the appellant. Since the appellant had earned Exempt Income (Tax Free) / of Dividend from shares of companies to the extent of ₹ 19,85,5077- during the year, / disallowance for the expenditure incurred to earn such tax exempt income needs to be made as contemplated in Section 14A r.w.r. 8D of the income Tax Rules. The appellant had voluntarily not made any disallowance u/s 14A while furnishing the Income Tax Return since the appellant had not incurred any such expenditure and therefore a show cause notice was issued to the appellant as to why the interest expenditure of ₹ 42,88,582/- appearing in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Rule 8D of Rules. 7.1 Regarding the administrative expenses the Ld. AR submitted that the assessee is maintaining personal books of accounts wherein the exempted income has been shown. The assessee in his personal income and expenditure account has already shown the expense of ₹ 2,728/- and therefore there cannot be disallowance on account of administrative expenses. 8. On the other hand Ld. DR vehemently supported the order of the authorities below. 9. We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, the own fund of the assessee exceeds the amount of investment shown in the balance sheet as on 31/03/2013. Therefore an inference can be drawn that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eads as under : If there are sufficient interest free funds to meet tax free investments, they are presumed to be made from interest free funds and not loaned funds and no disallowance can be made under section 14A . 9.4 In view of the above proposition, we hold that no disallowance of interest expense claimed by the assessee can be made on account of investments as discussed above. 9.5 Regarding the administrative expenses we find that the assessee has claim to have maintained separate books of accounts and accordingly the assessee has prepared separate income and expenditure account which is placed at page 7 of the paper book. 9.6 On perusal of the income and expenditure accounts we find that the assessee has claim on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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