9911796707
TMI Blog2023 (7) TMI 855X X X X Extracts X X X X X X X X Extracts X X X X ..... w.r. 8D(2)(ii), since no interest-bearing funds were utilised for the acquisition of the aforesaid investment. Balance investment Hon ble Supreme Court in South Indian Bank Ltd. [ 2021 (9) TMI 566 - SUPREME COURT] held that disallowance under section 14A would not be warranted where interest-free own funds exceed the investment in tax-free securities and in such a case the investment would be presumed to be made out of assessee s own funds. Therefore, we find no merit in disallowance made by the AO and upheld by the learned CIT(A) under section 14A read with Rule 8D(2) - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ents were out of own funds and therefore disallowance of interest of Rs. 80,08,92,309/- under section 14A read with Rule 8D(2)(ii) is uncalled for; 4. The above grounds/sub-grounds are without prejudice to each other, 5. The appellant craves the leave to add, amend or alter all or any of the grounds of appeal." 3. The only dispute raised by the assessee is against disallowance made under section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 ("the Rules"). 4. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is a private limited company and is engaged in the business of providing wireless services, electronics telecommunication, GSM/GPRS modems, buying, selling advert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4A read with Rule 8D can be made since the assessee has already made suo moto disallowance being 0.5% of the average investment. The Assessing Officer ("AO") vide order dated 30/12/2016 passed under section 143(3) of the Act did not agree with the submissions of the assessee and computed the disallowance of Rs. 80,08,92,309 under section 14A read with Rule 8D after considering the suo moto disallowance already made by the assessee. 5. The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee and upheld the disallowance made under section 14A read with Rule 8D. Being aggrieved, the assessee is in appeal before us. 6. We have considered the submissions of both sides and perused the material available on record. Fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6660.93 lacs, i.e. the fair value of the investment as on 15/10/2011, and recorded the same in its books of accounts. Thus, it is clearly evident that the investment to the extent of Rs. 146660.93 lacs in the books of the assessee is nothing but the shares transferred to the assessee pursuant to the aforesaid scheme of amalgamation with Essel Business Process Ltd. The Revenue has not brought any material to controvert the aforesaid facts as emanating from the material placed on record. Therefore, we are of the considered view that the investment to the extent of Rs. 146660.93 lacs cannot be considered for computation of disallowance under section 14A read with Rule 8D(2)(ii), since no interest-bearing funds were utilised for the acquisition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Supreme Court and the Hon'ble jurisdictional High Court in cases cited supra, we find no merit in disallowance of Rs. 80,08,92,309 made by the AO and upheld by the learned CIT(A) under section 14A read with Rule 8D(2)(ii). As regards the disallowance computed under section 14A read with Rule 8D(2)(iii) is concerned, it is undisputed that the assessee had suo moto disallowed Rs. 8,21,54,351 under section 14A read with Rule 8D, while filing its return of income. Therefore, in view of the aforesaid findings, the disallowance of Rs. 80,08,92,309 made by the AO and upheld by the learned CIT(A) is deleted. Accordingly, the grounds raised by the assessee are allowed. 8. In the result, the appeal by the assessee is allowed. Order pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
