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TMI Blog2016 (7) TMI 1642X X X X Extracts X X X X X X X X Extracts X X X X ..... tire investment was made in the earlier previous year is not correct. Apparently, there is an investment during the previous year which is relevant to the assessment year under consideration. Even though the CIT(A) found that the investments were made in the subsidiary companies, no such particulars are available how the companies in which investments were made are subsidiary of the assessee-company. CIT(A) by reproducing the order of this Tribunal has simply found that the investment in subsidiary companies cannot be considered for disallowance u/s 14A. In the absence of any material available on record, this Tribunal is of the considered opinion that the Assessing Officer has to examine the companies in which the investments were made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... group concern of a business concern. The Trust has to be always treated independently and it is an independent statutory body. The assessee now claims that the logo belongs to Shriram Ownership Trust was used by the assessee in its business activity and payment was made on turnover basis. The question arises for consideration is whether such payment is an allowable business expenditure u/s 37(1) of the Act. This Tribunal is of the considered opinion that when Shriram Ownership Trust is an independent statutory body, being a Trust, the assessee has to necessarily make payment for using the logo to Shriram Ownership Trust and such payment has to be at the market rate. Therefore, this payment being an expenditure for using logo is an allowable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee invested in shares and mutual funds and earned exempted income, the disallowance for expenditure has to be computed under Rule 8D of the Income Tax Rules, therefore, the Assessing Officer has rightly taken the average investment made during the first day of the financial year and last day of the financial year as found in the Balance Sheet and disallowed 0.5%. Therefore, the CIT(A) is not justified in allowing the claim of the assessee. 4. On the contrary, Shri R. Sivaraman, ld. Counsel for the assessee submitted that the very same issue was considered by this Tribunal in assessee s own case for assessment years 2010-11 and 2011-12 in I.T.A.Nos. 512 513/Mds/2015, dated 19.11.2015. This Tribunal found that when the investment was m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 011 was ₹ 13,84,09,890/-. The Assessing Officer has also found that the assessee has borrowed funds and paid interest during the year under consideration to the extent of ₹ 4,92,84,815/-. Therefore, in the absence of any income directly attributable to the interest paid by the assessee, the disallowance has to be computed under Rule 8D(2)(ii). From the assessment order it appears that the assessee has incurred expenditure which is directly attributable to any particular income by way of interest on the borrowed loan and also made investment during the year under consideration. Therefore, the observation made by the CIT(A) that the entire investment was made in the earlier previous year is not correct. Apparently, there is an inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amine the matter and bring on record the companies in which the investments were made and how such companies are subsidiary/holding company of the assessee and thereafter decide the same in accordance with law more particularly, in the light of the provisions of Rule 8D, after giving a reasonable opportunity to the assessee. 6. The next ground of appeal is with regard to disallowance of expenditure made by the assessee for acquisition of intangible asset viz. logo. 7. Shri Shiva Srinivas, ld. DR submitted that the assessee incurred expenditure of ₹ 35,87,560/- towards royalty. The same was said to be paid to Shriram Ownership Trust for using their logo. The Assessing Officer found that the expenditure incurred by the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to use, therefore, this Tribunal found that there was a composite agreement between the parties and accordingly allowed the claim of the assessee. Since the facts are identical as in the case of Shriram Chits Investments Pvt. Ltd, no interference in the order of the CIT(A) is called for. 9. We have considered the rival submissions on either side and also perused the material available on record. During the year under consideration the assessee has paid ₹ 35,87,560/- to Shriram Ownership Trust for using their logo. The assessee claimed the same as revenue expenditure while computing the taxable income. The Assessing Officer disallowed the claim of the assessee on the ground that what was paid by the assessee is a royalty, theref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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