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TMI Blog2025 (4) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals are similar, they were heard together and are disposed off by this common order. 2. The grounds raised by the Revenue in ITA No.2876/Chny/2024 for AY 2009-10 read as under:- "(1) The order of the Ld. CIT(A) is opposed to law on the facts and in the circumstances of the case. (2) The Ld. CIT(A) erred in deleting the disallowances of Rs. 3,64,92,898/- u/s 40(a)ia) for non-deduction of tax on the interest payments made towards VIP deposits. (3) The Ld. CIT(A) failed to notice that the VIP deposits are in the nature of time deposits only, hence, the provisions u/s 40(a)(ia) of the IT Act, 1961 are rightly invoked by the Assessing Officer. (4) The Ld. CIT(A) erred in deleting the disallowance of Rs. 2,65,58,185/- made u/s 14A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 36(1) (viia) and Rs. 2,65,58,185/- on account of disallowance u/s 14A and added back to the total income of the assessee. 4. At the outset, Ld. Counsel for the assessee submitted that the issues with regard to recurring deposits are covered in favour of the assessee by the co-ordinate Bench order of the Tribunal in assessee's own case for the assessment years 2009-10 in ITA No.3078/Chny/2024 dated 28.02.2025. The learned CIT DR did not dispute the averments of the learned counsel for the assessee and relied on the order of the AO. 5. We have heard both the sides and perused material on record. We find that the co-ordinate Bench of this Tribunal in assessee's own case in ITA No.3078/Chny/2024 vide order dated 28.02.2025 for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to Rule 27 of Income Tax (Appellate Tribunal) Rules, 1963. In this context, Ld.AR had relied on judgement of the Hon'ble Delhi High Court in the case of Sanjay Sawhney Vs. PCIT (2020) (5) TMI 441 (Del). The learned AR submitted the reopening of assessment is invalid, since reasons recorded is on borrowed satisfaction. In this context, Ld. AR relied on two judgements of the Hon'ble Bombay High Court in the cases of Gandhibag Sahakari Bank Ltd. Vs. DCIT (2023) 9 TMI 1344 (Bom) and Sociedade De Fomento Industrial Pvt. Ltd. & Shantilal Khushal Das & Bros P. Ltd Vs. ACIT (2024) 1 TMI 1080 (Bom) in support of his submissions that reopening of assessment is bad in law. However, since we have decided the issue on merits in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrived at directly. The case of the assessee is such one, since its investments and payment of interest, the component of managerial remuneration and other staff expenses are interlinked and it would be difficult to allocate individually. (i) The ITAT Special Bench, Mumbai vide its order dated 20.10.2008 in the cases of CIT Vs. Daga Capital Management Private Limited (ITA No. 1372/Del/2005), Maxopp Investments Limited Vs. ACIT (ITA No.183/Del/2005) and M/s. Cheminvest Limited Vs. DCIT (ITA 2048/Del/2005) has held that the provisions of section 14A(2) and (3) are procedural in nature and hence the application of Rule 8D would take effect retrospectively. (ii) Since the assessee has made disallowance on its own only on ad-hoc basis, applicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I2,82,57,685/- u/s. 14A r.w.r. 8D. On appeal before the ld. CIT(A), the ld. CIT(A) held that the provisions of Section 14A of the Act cannot be applied in case of exempt income earned from investment held in stock in trade. Reasoning of the ld. CIT(A) has been overturned by the Hon'ble Supreme Court in the case of Maxopp Investment Ltd vs. CIT, (2018) 402 ITR 640. Therefore contention of the assessee that provisions of Section 14A of the Act cannot be invoked, when the securities are held as stock-in-trade, cannot be accepted. As regards to other limb of the argument of the assessee that in the absences of any finding by the Assessing Officer as to how the contention of the assessee that no expenditure was incurred is incorrect no disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up by the Hon'ble Delhi High Court in the case of CIT vs. Taikisha Engineering India Ltd, 370 ITR 338 and PCIT vs. Moonstar Securities Trading and Finance Co. (P) Ltd, 105 taxmann.com 274. The Hon'ble Delhi High Court had firmly held that mere rejection of the explanation of the assessee per se cannot be accepted. This decision of Delhi High Court in the case of Moonstar Securities Trading and Finance Co. (P) Ltd, was affirmed by the Hon'ble Supreme Court in the case of dismissal of SLP in PCIT vs. Moonstar Securities Trading and Finance Co. (P) Ltd, 105 taxmann.com 275. In the light of the above legal positions, we are of the considered opinion that even in the present case no reason was assigned by the Assessing Officer for rejecting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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