DCIT 3(3)(1), MUMBAI vs. SHAPOORJI PALLONJI INFRASTRUCTURE CAPITAL COMPANY LTD, MUMBAI

During hearing, Shri Rajat Mittal, ld. DR, defended the addition made by the Assessing Officer. None was present for the assessee in spite of issuance of registered AD notice issued on 13/10/2017. The assessee neither presented itself nor moved adjournment petition. It seems that the assessee has nothing to say, therefore, we have no option but to proceed ex-parte, qua the assessee and tend to dispose of this appeal on the basis of material available on record.

2.1. We have considered the submissions of Ld. DR and perused the material available on record. The facts, in brief, are that the assessee company is engaged in the business of making investment in infrastructure projects, declared total income of Rs.22,45,90,364/- on 22/09/2011 and booked loss at Rs.3,00,31,665/- u/s 115JB of the Act. From the record of 3 M/s Shapoorji Pallonji Infrastructure Capital Company Limited. the assessee, it was gathered that the assessee had shown unsecured loans from IDFCL of Rs.48 crore as on 31/03/2011 and unsecured loan from the holding company of Rs.23,50,000/- and against such unsecured loans claimed interest expenditure of Rs.65,54,694/-. The Ld. Assessing Officer ignored the submissions of the assessee and worked out the disallowance as per formula specified in Rule-8D, resulting into disallowance of Rs.1,13,15,225/- u/s 14A r.w.r. 8-D. The proportionate interest expenses amounting to Rs.59,77,581/- were disallowed and added back to the total income. On appeal before the Ld. Commissioner of Income Tax (Appeal), the factual matrix was considered and relief was granted to the assessee, which is under challenged before this Tribunal. It is noted that the assessee made suo-moto disallowance of interest of Rs.5,35,28,118/- and of other expenses at Rs.2,50,000/- out of the total expenditure of Rs.6,55,46,945/-. The explanation of the assessee was rejected by the Assessing Officer invoking the provision of section -14A r.w.r-8D of the Rules. We find that there is no justification given by the Assessing Officer against methodology of computing of expenses attributable to earning exempt income. The own interest free funds by way of share