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TMI Blog2022 (1) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... r back to the file of Assessing Officer to re-compute/ rework the disallowance under section 14A read with Rule 8D. The assessee is also directed to explain the working of disallowance under section 14A before the Assessing Officer as and when called for. The Assessing Officer shall consider the working so provide by assessee and pass the order in accordance with law. Appeal of the assessee is allowed for statistical purposes - ITA No. 165/SRT/2018 - - - Dated:- 18-11-2021 - Shri Pawan Singh, Judicial Member And Dr. Arjun Lal Saini, Accountant Member For the Assessee : Shri Rushi Parekh, C.A For the Revenue : Shri Deependra Kumar Sr-DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of ld. Commissioner of Income tax (Appeals)-3, Surat dated 28.12.2017 for assessment year (AY) 2014-15. The assessee has raised following grounds of appeal:- 1. That both the learned lower authorities have grossly erred in disallowing interest expense to the tune of ₹ 12,02,094/- (out of total expense of ₹ 20,59,791/-) on the ground that the said proportio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That the Appellant submits that since she had not utilized full amount of interest paid by her, there does not arise any question of disallowance of interest under section 14A as done by the learned Assessing Officer in the impugned order. 6. It is therefore prayed that the above addition of ₹ 12,02,094/- made by the learned assessing officer may please be deleted. 2. Brief facts of the case are that assessee engaged in partnership firm and also derived rent income. During the assessment, Assessing Officer noted that assessee utilized borrowed fund in investment, which yielded exempt income, the assessee incurred interest expenses of borrowed fund which are directly related to investment for earning exempt income. Accordingly, the Assessing Officer issued show cause notice dated 05.12.2015 as to why disallowance should not be allowed made under section 14A r.w.s. Rule 8D. The assessee field her reply, vide dated 13.12.2016. In reply, the assessee stated that during the period under consideration, the assessee received total interest income of ₹ 11,26,549/- on capital investment in various firms. The assessee incurred interest expenses of ₹ 6,52,838/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jinal Fashion 25.00 56326 121567 5 Khushi Creation 15.00 0 6 Nita Fashion 25.00 750344 529494 7 Krishna Trendz 34.00 633526 199852 8 Kheni Fab 10.00 0 9 Shree Ramdev Associates 10.00 10783 27761 Total 15578801 1126549 4. The Ld. AR of the assessee submits that in Jinnal Fashion and Kheni Fab, the assessee has neither earned any profit nor any interest received. Therefore, no disallowance under section 14A with regard to these two entity was warranted. The ld AR submits that the assessee made suo moto made disallowance of ₹ 2,50,212/- under section 14A. the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm from which exempt income received:- Name of partnership firm Firms capital balance as on 31.03.2014 Firms capital balance as on 31.03.2013 Average value of investment Krishna Creation 23,80,996 20,54,166 2217566 Nita Creation 18,35,314 13,49,863 1592589 Jinal Creation 29,02,976 26,88,732 2795854 Jinal Fashion 17,59,882 14,02,344 1581113 Nita Fashion 66,05,965 23,58,289 4482127 Krishna Trendz 25,10,277 16,17,292 2063760 Shree Ramdev Associates 2,63,505 170,292 266815 Tot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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