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TMI Blog2021 (10) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... ence that disallowance of interest expenditure u/s 14A of the Act is not called for if the assessee has sufficient capital and reserve and surplus that interest free funds available are in excess of the investments held during the year. Since the interest free funds available with the assessee are in excess of the investment in equity shares at the close of the year and there being no specific finding by the AO about the nexus of the interest bearing funds having been applied for investment in equity shares, we find no justification in the finding of the ld. CIT(A) confirming the interest disallowance u/s 14A of the Act made by the AO. We accordingly set aside the finding of the ld. CIT(A) and allow the ground no. 3 raised by the assessee. - I.T.A. No.: 679/Kol/2019 (Assessment Year: 2015-16) - - - Dated:- 16-9-2021 - Sri Aby T. Varkey, Judicial Member And Sri Manish Borad, Accountant Member Sh. Amitava Bose, A/R, appeared on behalf of the Assessee. Smt. Ranu Biswas, Addl. CIT, appeared on behalf of the Revenue. ORDER Per Manish Borad, Accountant Member: This appeal filed by the assessee pertaining to the Assessment Year (in short AY ) 2015-16 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material evidence was produced . 2. For that on the facts and in the circumstances of the case Ld. CIT(Appeal) was wrong in confirming the disallowance the following amounts out of interest paid:- a) ₹ 2,61,29,653/- b) ₹ 1,06,00,823/- He was wrong in not properly appreciating the submission and details made before him during the course of appeal. He was wrong in stating that no cogent material evidence was produced . 3. For that on the facts and in the circumstances of the case Ld. CIT(Appeal) was wrong in confirming disallowance u/s.14A read with rule 8D(2](ii) of ₹ 6735915/- and under rule 8D(2)(iii) of ₹ 46190/- totaling to ₹ 6782105/-. He was wrong in not properly appreciating the submission and details made before him during the course of appeal. He was wrong in stating that no cogent material evidence was produced . 4. For that the appellant craves leave to adduce and/or alter further ground/s on or before hearing of the appeal. 4. Ld. Counsel for the assessee firstly took us to the paper book containing pages 1-69 and also referred to the following written submissions: 1. Assessee Company's main bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 6, page 7 8 of the Assessment Order) ₹ 2,61,29,653/- Break-up of disallowance of ₹ 2,61,29,653/- Total Interest paid ₹ 4,35,12,581/- Less: ₹ 1,06,00,823/- a) Disallowance as per para 4 of the Asstt. Order b) Disallowance of interest under disallowance u/s 14A Para 5 of the Asstt. Order ₹ 67,82,105/- ₹ 1,73,82,928/- ₹ 2,61,29,653/- The Company is regularly following the accounting method since inception on the basis of Accounting Standard (AS) specified by Institute of Chartered Accountant of India and on the advice of auditors. As such the company has followed the AS 2 for debiting the sum of ₹ 24,13,204/- and AS 16 for debiting the sum of ₹ 1,06,00,823/- as well as ₹ 2,61,29,653/-. Without prejudice to the above that appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see should have filed the projected time for completion of the project and also the projected profits from the projects undertaken. 6. We have heard the rival contentions and perused the records and carefully gone through the documents filed before us. We observe that the assessee is in the business of real estate development and is carrying out various projects/buildings which are under construction during the year under appeal. 6.1. As regards, ground no. 1 2 pertaining to addition of ₹ 24,13,204/- for disallowance of certain expenses specifically incurred for the project and also interest disallowance of ₹ 2,61,29,653/- ₹ 1,06,00,823/-, we find that in the written submissions filed by the ld. Counsel for the assessee and also during the course of hearing, it was stated that on account of following the Accounting Standard 2 (AS2), the alleged expenses were not capitalized. It was also admitted that legal and other expenses of ₹ 23,13,204/- relates to Shrachi Green Projects carried out at Jamshedpur which could not be completed in due time. It is also an admitted fact that the assessee took loan from Allahabad Bank for two projects namely Shrachi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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