DCIT 15(1)(1), MUMBAI vs. APOLLO LOGISOLUTIONS LTD, RAIGAD

आदेश / O R D E R PER R.C.SHARMA (A.M): This is an appeal filed by the Revenue against the order of CIT(A)- 24, Mumbai dated 23/12/2016 for A.Y.2012-13 in the matter of order passed u/s.143(3) of the IT Act. 2. The only ground taken by the Revenue relates to deletion of disallowance of interest expenditure u/s.14A r.w.R 8D(2)(ii) of the IT Act. 3. Rival contentions have been heard and record perused. 4. Facts in brief are that the assessee is a company engaged in the business of Management of Container Freight Station, Transportation of containers and other related services. During the course of assessment proceedings, AO observed that the assessee had made investments M/s. Apollo Logisolutions Ltd., during the year under consideration and the AR of the assessee was asked to furnish applicability of section 14A of the Act and was also asked to explain as to why disallowance u/s 14A r.w. Rule 8D should not be made. Ld. AO considered the submissions made by the assessee and held that no activity could be said to be automatic and that there was application of interest bearing funds towards making investments for earning of exempt income. Accordingly, the AO computed the disallowance u/s 14A in respect of interest and other expenses at Rs.64.56 lakhs and added the same to the total income of the assessee.