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TMI Blog2018 (7) TMI 2288X X X X Extracts X X X X X X X X Extracts X X X X ..... was paid exclusively for business purposes only. Accordingly dismiss ground nos. 1 and 2 raised by the revenue. Disallowance u/s 14A - interest expenses incurred for investment in subsidiaries and administrative expenses - HELD THAT:- We are of the considered view that no interest disallowance was called for u/s 14A of the Act as the assessee had sufficient interest free funds in the shape of share capital to cover up the investment in equity shares and accordingly are not inclined to make any interference in the findings of the learned Commissioner of Income Tax (Appeals) - Decided against revenue. - ITA No. 1356/Ind/2016 - - - Dated:- 12-7-2018 - Shri Kul Bharat, Hon ble Judicial Member and Shri Manish Borad, Hon ble Accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 197/- made on account of sales commission expenses u/s 37 of the Act. 4. At the outset, the learned counsel for the assessee submitted that the issue raised by the revenue in this appeal is squarely covered in favour of the assessee by the decision of the coordinate Bench in ITA No. 620/Ind/2016. The learned DR could not controvert this submission of the learned counsel for the assessee. 5. We have heard both the parties and perused the material available on record. The revenue is aggrieved with the deletion of disallowance of commission expenditure of Rs.1,64,60,197/- claimed by the assessee for sales made during the year. We find that during the year 80% of total sales made by the assessee is through Government nodel agencies, viz. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the reply to this question had to be in negative as the commission agents were appointed by the assessee and not by the Government nodal agencies. We also note that the assessee is dealing in supplies of equipments to the farmers in as many as three states spread over a large geographical area. Therefore, requirement of Representatives for doing such jobs cannot be denied. Further, M.P. State Agro State Marketing Development Corporation Limited vide their letter dated 21.02.2014 placed at paper book page no. 53, prescribes the various formalities and services required to be handled by the assessee or representatives of the agents. Therefore, we are of the considered opinion that the ld. CIT(A) was justified in deleting the addition on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein the Delhi High Court dealing with identical question has already decided the matter against the present appellant-Revenue. 11.Therefore, considering the totality of the facts and respectfully following the decision of Jurisdictional High Court, we are not inclined to interfere with the findings of the ld. CIT(A). Accordingly, the appeal of the Revenue in respect of above three grounds is dismissed. 6. We further observe that the decision of the Tribunal stands confirmed by the Hon'ble jurisdictional High Court vide ITA Nos. 92 93/2017 dated 1.2.2018 wherein the Hon'ble Court followed its earlier order in the case of Principal CIT vs. Gunvantibai; ITA No. 231/2017. We, therefore, respectfully following the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has not brought any fact on record to prove that the interest bearing funds have been applied for making investments in equity shares. In this situation, the judgment of the Hon'ble Bombay High Court in the case of CIT Vs. Reliance Utilities Power Limited; 313 ITR 340 is squarely applicable which has been relied upon by the learned Commissioner of Income Tax (Appeals) also observing as follows :- 5. This ground of appeal has been raised against the disallowance of Rs. 8,28,518/- u/s 14A of the IT Act, 1961 on the basis of application of rule 6D. I have gone through the assessment order as well as the detailed submissions made by the appellant. The appellant own funds appearing in its balance sheet by way of capital stands at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at same time loans are taken, then a presumption would arise that investment has beenb made out of interest free funds available with company and not out of loans. Attention is also invited to the decision of Delhi High Court in CIT vs. Tin Box Co. (2003) 260 ITR 637 to hold that when the assessee had sufficient funds and non interest funds were advanced to a sister concern, no disallowance of interest was justified. The aforesaid principle that if own funds are more than investments then no disallowance on account of interest can be made under section 14A He submitted that been upheld by the jurisdictional Indore Bench of Income tax Appellate Tribunal in following cases :- a. DCIT vs. D H Secheron Electrodes Pvt. Ltd.(ITA 313/In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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