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TMI Blog2016 (9) TMI 1624X X X X Extracts X X X X X X X X Extracts X X X X ..... ments in the shares was made out of own funds and not from the borrowed funds. We also find merit in the submissions of the ld AR that the investments in group company were made for strategic purposes and to which provisions of s. 14A r.w.8D cannot be applied. In view of facts discussed above we are of the considered view that order of CIT(A) is wrong to that extent and accordingly we set aside the order of ld. CIT(A) and direct the AO to delete the addition to the extent thus sustaining disallowance to the extant of ₹ 77,311/-. Accordingly, the appeal of the assessee is partly allowed. - I.T.A. No. 368/Mum/2015 - - - Dated:- 14-9-2016 - Shri Shailendra Kumar Yadav, JM And Shri Rajesh Kumar, AM For the Assessee : Shri K. G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment order and accordingly disallowed the same by passing assessment order dated 16.2.2014 by assessing the total income at ₹ 2,11,60,670/- under the normal provisions of Act and at ₹ 2,69,11,700/- under section 115JB of the Act. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A) who also dismissed the appeal of the assessee for the reasons as has been incorporated in the appellate order vide para 3.5 to 3.8 of the order as reproduced below: 3.5 In the judgment of the Chennai Bench of ITAT in M/s. Lakshmi Ring Travellers (TS-210-ITAT-2012(Chny.) held that Sec.14A is a deeming provision for presumptive disallowance. Thus, Sec.14A disallowance would be attracted by the face ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO 317 ITR AT 86 (Del-SB), relied on by the CIT(A), the case is against the assessee. Respectfully following the decisions as cited by the CIT(A), we have no reason to disturb the findings of the CIT(A),which we uphold. 3.6.2 The Hon'ble Special Bench of ITAT Mumbai in M/s. Oaga Capital Management (P) Ltd. 26 SOT 603 (Mum) has held as under: Section 14A is wide enough to cover all types of expense direct as well as indirect The word 'in relation to' used in Section 14A are very broad expression Section 14 A applies to even incidental exempt income Section 14A would be applicable even if there is no direct and proximate connection between the exempt income and expenditure 3.6.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,88,643/- as per detailed given in schedule-5 to the balance-sheet which is at page 5 of the paper book which included ₹ 2,85,00,000/- coming from the earlier years as investment in Kilitch Drugs (India) Ltd which is a group company and therefore the remaining investment were only ₹ 10,19,595/-. The ld. Counsel submitted that the disallowance u/s 14A r.w.r 8D was not applicable to the strategic investments which were made with the motive of gaining control over the subsidiary and not with the motive of earning dividend income by making such investment. The ld. Counsel argued that the loans of ₹ 16,43,55,635/- as on 31.3.2011 was for specific purpose and were used accordingly and not for the purposes of purchase of shares i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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