TASHI INDIA LIMITED,NAGPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCL-2, NAGPUR

The assessee’s sole substantive grievance herein challenges correctness of both the learned lower authorities action making sec.14A r.w. Rule 8D disallowance of Rs.3,61,731/- inter alia involving proportionate interest

I have given my thoughtful consideration to the vehement rival stands against and in support of the impugned disallowance. The assessee’s first and foremost contention raised during the course of hearing is that it had non-interest bearing funds including share capital with reserve and surplus totaling to Rs.8,44,78,055/- as against the corresponding investments made of Rs.87.40 lakhs yielding the impugned exempt income(s).

Learned DR could hardly dispute the assessee’s foregoing fund position as per it’s balance-sheet paper book page-18. Faced with this situation, I quote CIT vs. HDFC Bank Ltd., [2014] 49 taxmann.com 335 (Bom.) to delete the impugned proportionate expenditure disallowance of Rs.3,45,402/-.

The factual position is found to be altogether different so far as the impugned administrative expenditure disallowance made by both the learned lower authorities amounting to Rs.43,702/- is concerned. Learned counsel has not been able to substantiate the corresponding pleadings of 3 ITA.No.98/NAG./2023 having incurred no expenditure qua the exempt income herein. There would not be any dispute that this last head of administrative expenditure disallowance is of indirect nature which requires the assessee to plead and prove all the relevant facts in order to claim that no such amount has been spent/ incurred in the relevant previous year. I accordingly reject the assessee’s instant latter substantive ground in very terms.

This assessee’s appeal is partly allowed in above terms.