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TMI Blog2024 (7) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the case upheld the conclusion arrived at by the CIT (Appeals) to the effect that the assessee was having the interest free funds which were more than the investment made for earning exempted income. Therefore, the presumption of the AO that the investment so made is out of the interest bearing fund was without any basis in absence of any material to support the case of the Revenue that the assessee had utilised the borrowed funds for investment for earning exempt income. In view of the above facts and concurrent findings of the CIT (Appeals) and the Tribunal, we were astonished how the sanction was granted by the Principal Commissioner of Income Tax (for short the PCIT ) to prefer an appeal and therefore the original file granting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2016-17 to 2018-19 filed by the respondent-Assessee along with ITA No. 60 of 2023 for Assessment Year 2018-19 filed by the appellant-Revenue. 3.2. The respondent-assessee claimed dividend income of Rs. 5,298/- on investment made by the assessee and also claimed interest expenses of Rs. 5,04,35,666/-. The Assessing Officer thereafter made an addition of Rs. 5,04,35,666/- under Section 14A of the Act read with Rule 8D of the Rules construing the investment made for earning exempt income was made out of the borrowed funds. 3.3. Being aggrieved, the assessee challenged such addition by preferring an appeal before the CIT (Appeals) and contended that the assessee has earned only Rs. 5,298/- as dividend which has been disallowed in the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (Appeals) to the effect that the assessee was having the interest free funds which were more than the investment made for earning exempted income. Therefore, the presumption of the Assessing Officer that the investment so made is out of the interest bearing fund was without any basis in absence of any material to support the case of the Revenue that the assessee had utilised the borrowed funds for investment for earning exempt income. 4. In view of the above facts and concurrent findings of the CIT (Appeals) and the Tribunal, we were astonished how the sanction was granted by the Principal Commissioner of Income Tax (for short the PCIT ) to prefer an appeal and therefore the original file granting sanction was called for. 5. Learned Seni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wherefrom income is exempt. Further, the tax effect involved in this case is Rs. 1,74,54,775/- which is more than the limit for filing appeal before the Hon'ble High Court as per the Board's Circular No. 17/2019 dated 08.08.2019 (amendment of Circular No.3/2018 dated 11.07.2018). Therefore, further appeal before the Hon'ble High Court is recommended in this case for AY 2018-19. 7. From the above reasons given by the PCIT, it is clear that the same are contrary to the record as neither the Assessing Officer, CIT (Appeals) or the Tribunal has considered or given any findings of fact to the effect that the interest free funds available with the assessee was invested in fixed assets and other investment of much more value than the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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