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TMI Blog2023 (6) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... reconciliation of the balances in the preceding year, and there being no fresh transactions, AO cannot be allowed to make addition in the current year towards opening balances. Therefore, order to delete the addition. Disallowance u/s.14A r.w.r. 8D - addition made towards interest expenses - HELD THAT:- When the capital and interest free unsecured loan with the assessee far exceeded the interest free loan advanced to the sister concern, disallowance of part of interest out of total interest paid by the assessee to the bank was not justified. More recently, in CIT(LTU) VS. Reliance Industries Ltd. [ 2019 (1) TMI 757 - SUPREME COURT ] has reiterated the same view. When we examine the amount of Investments at Rs. 67.95 lakh lakh as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ening balance on 1.4.2014 Rs. 49,28,990 (addition made in the last year) Rs. 56,47,534 (balance shown by the creditor)]. Similarly, as regards the other creditor, namely, M/s Ganesh Bansode, the opening and closing balance for the preceding year, namely, as on 01-04-2013 and 31.3.2014, as appearing in the books of account of the assessee stood at Rs. 1,30,504/-. The AO observed that the addition made in the preceding year due to non-reconciliation in this account was Rs. 4,42,663/-. He made further addition of Rs. 1,30,473/- towards difference in the opening balance as was not added in the preceding year. These two amounts totalled up to Rs. 5,30,186/-, which became the subject matter of the addition. The ld. CIT(A) countenanced the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 33,978/- is the amount of disallowance u/s.14A r.w.r 8D(2)(iii), which has been rightly computed at 0.5% of the average value of investments towards expenses. 8. Coming to the first component of Rs. 92,108/-, being, the disallowance made towards interest expenses u/s.14A r.w.r 8D(2)(ii), it is seen from the AO s table drawn on page 6 that the total of investments yielding exempt income stands at Rs. 67,95,634/. As against that, the assessee s capital is Rs. 1.64 crore. The Hon'ble Bombay High Court in CIT vs. Reliance Utilities and Power Ltd. (2009) 313 ITR 340 (Bom) , has held that where an assessee possessed sufficient interest free funds of its own which were generated in the course of relevant financial year, apart from su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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