ACIT 3(1)(2), MUMBAI vs. EDELWEISS FINANCE & INVESTMENTS LTD, MUMBAI

PDF · subscribers
ITA 6334/MUM/2016Status: DisposedITAT Mumbai03 January 2018AY 2011-122 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal, following its previous orders for earlier assessment years, decided that no disallowance under Rule 8D(2)(ii) and (iii) was warranted. The Tribunal upheld the CIT(A)'s decision to exclude interest-free funds and investments in stock-in-trade from the disallowance calculation.

What were the facts?

The Assessing Officer (AO) appealed against the CIT(A)'s order concerning disallowance under Section 14A read with Rule 8D. The assessee is a non-banking company involved in financing and investment activities.

What were the issues?

Whether disallowance under Section 14A read with Rule 8D is applicable when the assessee has sufficient interest-free funds and whether investments in stock-in-trade should be excluded for calculating disallowance.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा लेखा सद"य लेखा लेखा सद"य सद"य, राजे"" सद"य राजे"" राजे"" केकेकेके अनुसार राजे"" अनुसार अनुसार/ PER RAJENDRA, AM- अनुसार Challenging the order dated 29/07/2016 of CIT(A)-8, the Assessing Officer (AO)has filed the present appeal.Assessee-company is a non-banking company registered with RBI. It carries on the business of financing,money-lending,corporate lending,providing finance or loans against shares,stocks, bonds, debentures or other similar instruments,apart from trading / investing in securities and commodities including derivatives.It filed its return of income on 27/09/2012,declaring total income at Rs.11,05,70,110/-.The AO completed the assessment u/s.143(3)of the Act,on 14/04/2015 determining its income of the assessee at Rs.27.23 crores. 2.The AO has raised two Grounds of appeal with regard to disallowance u/s.14A r.w.r. 8D of the Rules.It was brought to our notice that while adjudicating the cross appeals filed by the assessee and the AO for the AY.s 2008-09, 2009-10 and 2010-11,the Tribunal on 16/12/2016, had decided both the issues against the AO.We are reproducing the relevant portion from the order of the Tribunal (ITA/6610/M/11;7658/M/11; 1791/M/13) and same read as under :- “…..7. In the cross appeal (ITA No.7658/M/2011), the Revenue raised various issues. The first issue raised in this appeal relates to the disallowance u/s 8D(2)(ii) of the Rules. Bringing our attention to the chart filed in this regard, Ld Counsel for the assessee submitted that the CIT (A) granted relief on the issue of applicability of clause (ii) of Rule 8D(2) relating to interest disallowance. In this regard, CIT (A) held that the case is covered by the judgment of the Hon’ble jurisdictional High Court in the case of CIT vs Reliance Utilities & Power Limited (313 ITR 340) (Bom). Further, CIT (A) also relied on another judgment of the Bombay High Court in the case of HDFC Bank Limited vs. DCIT (383 ITR 529) (Bom) and mentioned that the assessee is having excess interest free funds in such case, no disallowance is called for under clause (ii) of Rule 8D(2) of the Rules. We agree with the said decision of the CIT (A) on this issue and therefore, the conclusions drawn by the CIT (A) are upheld. Further,

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Recent GST High Court judgments

Search GST case law →