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

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,