9911796707
TMI Blog2021 (8) TMI 1190X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose of earning any exempt income - assessee had vehemently pleaded before the lower authorities that interest paid on loans are used only for the purpose of non-agri division activities of the assessee which does not require any apportionment towards the agri- division. This fact has not been controverted by cogent evidences by the lower authorities - there cannot be any disallowance of interest under second limb of Rule 8D(2) of the Rules - disallowance made under first and third limb of rules, the same gets subsumed in the disallowance of loss incurred from agricultural division which had already been made by the assessee in the return of income. Accordingly, there cannot be any disallowance of expenses separately u/s.14A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 31,77,677/- in the return. When show-caused by the ld. AO as to why the provisions of Section 14A of the Act r.w. Rule 8D of the Rules be not imposed on the assessee, the assessee vide reply dated 26/11/2018 and 28/11/2018 submitted the working of disallowance u/s.14A along with summary of assets of agri and non-agri division, separate profit and loss account for agri division and the details of administration expenses incurred in both the divisions. The assessee pleaded that the loans on which interest was paid were not related to agri business of the assessee and that the interest paid on overdraft facility had been used only for non-agri division. It was further submitted that for agricultural activities, interest free loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - ₹ 70,858/- ========= Total ₹ 42,25,301/- Less expenses disallowed by the assessee towards agricultural income ₹ 31,77,677/- Less exempt income from agri business ₹ 5,11,677/- =============== Remaining amount for disallowance ₹ 5,35,981/- ( u/s.14A) =============== 3.1. We find that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any apportionment towards the agri division. This fact has not been controverted by cogent evidences by the lower authorities. Hence, there cannot be any disallowance of interest under second limb of Rule 8D(2) of the Rules. As far as the disallowance made under first and third limb of rules, the same gets subsumed in the disallowance of loss incurred from agricultural division which had already been made by the assessee in the return of income. Accordingly, there cannot be any disallowance of expenses separately u/s.14A of the Act in the peculiar facts of the instant case. Accordingly, the ground No.1 raised by the assessee is allowed. 4. In the result, appeal of the assessee is allowed. Order pronounced on 08/03/2021 - - TaxT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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