9911796707
TMI Blog2023 (4) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... closing balances of the value of investments. Disallowance on account of interest - HELD THAT:- As seen from the assessee s balance sheet that the investments in securities yielding exempt income has been reflected as Non Current Investments amounting to Rs.197.98 crore under the broad head Non Current Assets . As against that, the assessee s balance sheet shows shareholders fund to the tune of Rs.166.20 crore plus Other long term borrowings Unsecured to the extent of Rs.127.50 crore taken from related parties and directors which are non-interest bearing. If we add up the total amount of non interest bearing funds available with the assessee, it clearly emerges that the said amount is far in excess of the amount of investment in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to as the Act ) amounting to Rs.3,94,25,461. 4. Briefly stated, the facts of the case are that the assessee claimed exempt income of Rs.10,71,22,273 on account of Dividend u/s 10(34) and Long term capital gain on equity u/s 10(38) of the Act. No disallowance was offered u/s 14A. On being called upon to explain the reasons, the assessee submitted that no such expenditure was incurred. The Assessing Officer (AO) computed the disallowance u/s 14A read with rule 8D in two parts viz. (i) Rs.1,90,57,300 towards 1% of average investments and (ii) Rs.2,03,68,161 consisting of interest of Rs.1,95,62,471; STT on shares of Rs.2,02,312; brokerage on shares of Rs.5,27,206; and Demat charges of Rs.76,172. The ld. CIT(A) did not provide any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to Rs.1,95,62,471; disallowance on account of STT on shares; brokerage on shares; and Demat charges. The ld. AR did not press the remaining three items and contested only the disallowance of interest made by the AO at Rs.1,95,62,471. This figure of disallowance of interest has been picked up by the AO from the Notes to financial statements having reference to Note number 19 giving breakup of Finance cost . This breakup includes interest on HDFC loan amounting to Rs.1,95,62,471. It is this exact amount of interest on HDFC loan paid by the assessee that has been taken cognizance of by the AO in the disallowance u/s 14A. However, it is pertinent to note that the above referred interest on HDFC loan is in respect of loan taken for acquisiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
