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TMI Blog2022 (1) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... ing substantive grounds in the instant appeal. "1. The Order of the Commissioner of Income Tax (Appeals)-2. Hyderabad dated 28-07-2016 is erroneous, contrary to law and facts of the case. 2. The Commissioner of Income Tax (Appeals) erred in sustaining the disallowance of Rs. 137,73,184/- (comprising of interest of Rs. 56,42,302/- Proportionate part of Rs. 167,01,148/- of interest expenses and 0.5% of average value of exempt investment at Rs. 81,30,882/-) made by the Assessing Officer u/s. 14A r.w.r. 8D stating that appellant made investments "with an intention to earn exempt income, even though he has not earned any exempt income". In this connection, the appellant submits that (i) the expenditure debited to the profit and loss account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce u/s. Sec. 36(1)(iii) is not justified." 3. It is noticed at the outset that regarding the assessee's former substantive ground that it has not derived any exempt income in the impugned assessment year so as to set section 14A r.w. Rule 8D in motion. Case Law Cheminvest Ltd. Vs. CIT (2015) 378 ITR 33 (Del), CIT Vs. Corrtech Energy Pvt. Ltd. 223 Taxmann.com 130 (Guj) and CIT Vs. CIT Vs. Chettinad Logistics Pvt. Limited (2017) 80 taxmann.com 221 (Madras) holds that the impugned disallowance is attracted only in case an assessee derives exempt income and not otherwise. We thus accept the assessee's instant former substantive grounds for this precise reason alone and make it clear that it shall be very much open for the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red wholly and exclusively for the purpose of its own business. The assessee's case on the other hand, quoted hon'ble apex court's landmark decisions in SA Builders Vs. CIT 288 ITR 1 (SC) and Hero Cycles Pvt. Ltd. Vs. CIT 379 ITR 347 that commercial expediency is not merely restricted to assessee's own business but also includes its subsidiaries' business activities as well. Be that as it may, we note that CIT(A)'s order has simply brushed aside the assessee's contentions without examining the clinching commercial expediency in the impugned interest expenditure. We therefore deem it appropriate to restore the instant latter issue back to the Assessing Officer for his afresh factual adjudication of assessee's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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