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TMI Blog2024 (6) TMI 934X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer ("AO"), wherein it has been submitted that due to technical glitch the impugned orders passed by the learned CIT(A) were not reflecting in the Income Tax Business Application ("ITBA") portal. It was only after raising the ticket on the ITBA helpdesk, the impugned orders were re-uploaded on the ITBA portal on 17/08/2023. Thereafter, necessary steps were taken for filing the present appeal before the Tribunal. It is submitted that due to the aforesaid circumstances the present appeals are delayed. 3. We find that the reasons stated by the AO for seeking condonation of delay fall within the parameters for grant of condonation laid down by the Hon'ble Supreme Court in the case of Collector Land Acquisition, Anantnag Vs. MST Katiji and others: 1987 SCR (2) 387. It is well established that rules of procedure are handmaid of justice. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, the Revenue did not stand to benefit by the late filing of the present appeals. In view of the above and having perused the condonation applications filed by the AO, we are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xempt income has required to be disallowed u/s 14A of the Act. ?" 6 f. "Whether on the facts and on the circumstances of the case, the Ld. CIT(A) was right in ignoring the AO‟s observation that the assessee has failed to establish commercial expediency of the interest bearing loan invested in acquiring assets for projects and income was not generated during the year under consideration?" 7 g. "In this case the CIT(A) order was received in Appeal Module of ITBA portal of Pr.CIT-19, Mumbai on 23.03.2023, however, due to technical glitch the order could not be opened for reading. After raising ticket on ITBA helpdesk, the said order was re-uploaded on ITBA Portal on 17.08.2023. Therefore, the appeal in this case is late by 98 days. The appellant prays that the delay in filing of appeal due to technical glitch may kindly be condoned." 8 h." The appellant prays that the order of the Ld. CIT(A), on the grounds be set-aside and that of the Assessing Officer be restored ?" 9 i. "The appellant craves leave to amend or alter any grounds or odd a new ground which may be necessary during the course of Appellate proceedings?" 5. The first issue that arises for our consideration p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd. In the present case, it is undisputed that the assessee received dividend income of Rs. 66,614, which was claimed as exempt under section 10(34) of the Act. It is the plea of the assessee that investment in shares and mutual funds are made out of own funds, and therefore, borrowed funds, on which interest was paid by the assessee, was not utilised for the purpose of investment. In support of its submission, the assessee has furnish its capital account and consolidated balance sheet as on 31/03/2012, which forms part of the paper book on page no.12. From the perusal of the details in capital account and consolidated balance sheet, we find that the investment in shares (unquoted) is Rs. 5,43,02,835, and investment in shares/debentures (quoted) is Rs. 69,97,724. We further find that the assessee own funds are Rs. 6,01,97,179 and he received interest-free advances/loan of Rs. 24,05,23,708, during the year. From careful perusal of the consolidated balance sheet and capital account of the assessee, it is further pertinent to note that the assessee has also given interest-free loan/advances amounting to Rs. 17,60,28,513. However, it is sufficiently evident that the assessee's own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed as exempt by the assessee under section 10(34) of the Act is only Rs. 66,114. We find that the Hon'ble jurisdictional High Court in Nirved Traders (P.) Ltd. v/s Dy. CIT, I.T. Appeal No.149 of 2017, vide judgement dated 23/04/2019, has held that disallowance under section 14A of the Act cannot be more than exempt income. We further find that the Special Bench of the Tribunal in the case of ACIT v/s. Vireet Investment (P) Ltd. (2017) 165 ITD 27 (Delhi-Trib.), held that only those investments are to be considered for computing average value of investments, which yield exempt income during the year. Therefore, we direct the AO to recompute the disallowance under section 14A read with Rule 8D(2)(iii) of the Rules in view of the aforesaid decisions, and if the disallowance so computed by applying above said principles works out to be lower than the value of exempt income, then the disallowance under section 14A should be restricted to the lower amount so computed. 12. Accordingly, the impugned order in respect of deletion of disallowance under section 14A read with Rule 8D(2)(ii) of the Rules is upheld. While in respect of disallowance made under section 14A read with Rule 8D(2)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 6,01,97,179 is utilized in personal assets including investment in shares and debentures which is Rs. 6,41,30,851/-. The amount invested in the shares and securities has been largely made from the capital of the assessee. Accordingly the Dividend income or exempt income as claimed by your honor has been earned from the capital invested by the assessee and no interest or any revenue expenditure is claimed to earn such income. The excess investment over and above from the capital of Rs. 39,33,672/- is made from interest free advances received from relatives which was at perusal with the assessee as evident from above balance-sheet. 3. Secondly, the assessee has taken interest free loans aggregating to Rs. 24,05,23,708 as against which the assessee has given interest free loans or advances aggregating to Rs. 17,38,68,756. Accordingly, further utilizing an amount of Rs. 39,33,672, the assessee still had interest free funds available of Rs. 6,27,21,280. 4. Thirdly, the assessee has taken interest bearing loans aggregation to Rs. 61,85,61,946. As against the same, the assessee has given interest bearing loans of Rs. 58,01,29,305 and investment in projects on which interest is ..... 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