CIT v. Microlabs Ltd.

383 ITR 490High Court2016#553 most cited

What is CIT v. Microlabs Ltd. authority for?

If an assessee possesses interest-free funds exceeding investments in tax-free securities, it is presumed that investments are made from these own funds, precluding disallowance of interest expenditure under Section 14A read with Rule 8D(2)(ii). Additionally, weighted deduction under Section 35(2AB) is computed on the gross expenditure incurred, not net expenditure after reducing income earned.

175

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2016 to 2026.

Also referred to as

CIT v. Microlabs Ltd. · Section 14A · Rule 8D(2)(ii) · disallowance of interest expenditure · interest-free funds · investments in tax-free securities · own funds presumption · Section 35(2AB) · weighted deduction R&D · gross expenditure deduction

Also reported as

79 Taxmann.com 365

Sections most often in play

Section 14ASection 143(3)Section 35(2AB)Section 115JBSection 144C(3)Section 37(1)Section 8DSection 10(34)
Read the full judgment

Issues it is cited on

section 8d(2)(ii)section 14(2)r&d expendituresection 92(1)disallowance of interest expendituresection 14a(1)section 92b(1)section 115jb(2)corporate guaranteeweighted deductionsection 35(2ab)legal expenses

Judgments citing CIT v. Microlabs Ltd.

Vaishnavi Infrastructure Private Limited, Bangalore vs. The Assistant Commissioner of Income Tax, Central Circle-1(2), Bangalore

In the result, all the three appeals filed by the assessee stands allowed for statistical purposes

ITA 727/BANG/2022[2009-10]Status: DisposedITAT Bangalore30 Nov 2022AY 2009-10

Bench: Smt. Beena Pillai & Ms. Padmavathy S

For Appellant: Smt. Suman Lunkar, CA
Section 132Section 143(2)Section 143(3)Section 14ASection 153A

…re made out of borrowed funds or personal funds. If personal funds, the issue of disallowance should have been adjudicated in the light of judgment of Hon'ble Apex Court in the case of Munjal Sales Corporation v. CIT 298 ITR 298(SC) and CIT v. Microlabs Ltd., 383 ITR 490 (Kar.) Therefore, we are of the view that the issue requires proper verification and examination by the AO. Accordingly, we set aside the order of the CIT(Appeals) in this regard and restore the issue to the file of Assessing Officer to readjudicate the issue in the light of relevant provisions of the Act afresh, after affording opportunity of be…

Vaishnavi Infrastructure Private Limited, Bangalore vs. The Assistant Commissioner of Income Tax, Central Circle-1(2), Bangalore

In the result, all the three appeals filed by the assessee stands allowed for statistical purposes

ITA 695/BANG/2022[2012-13]Status: DisposedITAT Bangalore30 Nov 2022AY 2012-13

Bench: Smt. Beena Pillai & Ms. Padmavathy S

For Appellant: Smt. Suman Lunkar, CA
Section 132Section 143(2)Section 143(3)Section 14ASection 153A

…re made out of borrowed funds or personal funds. If personal funds, the issue of disallowance should have been adjudicated in the light of judgment of Hon'ble Apex Court in the case of Munjal Sales Corporation v. CIT 298 ITR 298(SC) and CIT v. Microlabs Ltd., 383 ITR 490 (Kar.) Therefore, we are of the view that the issue requires proper verification and examination by the AO. Accordingly, we set aside the order of the CIT(Appeals) in this regard and restore the issue to the file of Assessing Officer to readjudicate the issue in the light of relevant provisions of the Act afresh, after affording opportunity of be…

Century Real Estate Holdings Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-2(2), Bangalore

In the result, the appeal of the assessee is partly allowed

ITA 580/BANG/2022[2013-14]Status: DisposedITAT Bangalore30 Nov 2022AY 2013-14

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year: 2013-14

For Appellant: Smt. Sheetal Borkar, A.RFor Respondent: Shri Gudimella V.P. Pavan Kumar, D.R

…ble with the assessee was Rs.355.57 crores while the value of investment in partnership firm mutual funds and shares aggregated to Rs.251.82 crores. In view of the decision rendered by Hon’ble Karnataka High Court in the case of CIT Vs. Micro Labs Ltd. (2016) 383 ITR 490, no disallowance out of interest expenditure is called for. For the sake of convenience, we extract below the observations made by Hon’ble Karnataka High Court in the above said case. ITA No.580 & 740/Bang/2022 M/s. Century Real Estate Holdings Pvt. Ltd., Bangalore Page 24 of 29 “40. We have heard the rival submissions. A copy of the availabili…

M/S United Spirits Limited, Bangalore vs. Joint Commissioner of Income Tax Special Range-7, Bangalore

In the result, ground 7 is allowed for statistical purposes

ITA 3091/BANG/2018[2014-15]Status: DisposedITAT Bangalore22 Nov 2022AY 2014-15

Bench: Shri George George K, Jm & Shri Laxmi Prasad Sahu, Am It(Tp)A No.3091/Bang/2018 : Asst.Year 2014-2015 M/S.United Spirits Limited The Joint Commissioner Of 6Th Floor, Ub Towers, Income-Tax, Special Range-7 V. Bangalore. # 24 Vittal Mallya Road Bangalore – 560 001. Pan : Aaccm8043J. (Appellant) (Respondent)

For Appellant: Sri.Percy Pardiwala, Senior Counsel and Sri.Ankur Pai, AdvocateFor Respondent: Sri. Manjunath Karkihalli, CIT –DR
Section 115PSection 143(2)Section 143(3)Section 14ASection 234BSection 36(1)(iii)Section 92C

…arious contentions of Ld A.R, which are summarized below:- (a) It is the contention of Ld A.R that the own funds available with it is in excess of the investments. The jurisdictional Hon'ble Karnataka High Court in the case of CIT vs. Microlabs Limited (2016)(383 ITR 490) has dealt with an identical issue. The High Court extracted following decision rendered by the Tribunal:- …….. Accordingly, we direct the AO to examine the claim of the assessee and if it is found that the own funds available with the assessee is in excess of the value of investments, then no disallowance u/r 8D(2)(ii) out of interest expenditur…

M/S Bosch Limited, Bangalore vs. Assistant Commissioner of Income Tax Ltu Circle-1, Bangalore

In the result, appeal of the assessee is partly allowed

ITA 1629/BANG/2018[2013-14]Status: DisposedITAT Bangalore13 Sept 2022AY 2013-14

Bench: Shri N.V. Vasudevan & Ms. Padmavathy Sassessment Year : 2013-14 Bosch Limited, Vs. The Assistant Commissioner Hosur Road, Adugodi, Of Income Tax, Ltu, Bangalore – 560 030. Circle 1, Pan: Aaacm 9840P Bangalore. Appellant Respondent Appellant By : Shri Percy Pardiwala, Advocate Respondent By : Shri V S Chakrapani, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 01.09.2022 Date Of Pronouncement : 13.09.2022 O R D E R Per Padmavathy S.2. This Appeal Is Against The Order Of The Cit(Appeals), Bangalore-9, Bangalore Dated 31.3.2018 For The Assessment Year 2013- 14. 3. The Assessee Raised Grounds Pertaining To The Following Issues:- Deduction U/S. 35(2Ab) Computed On Net Expenditure As Opposed To Gross Expenditure Disallowance Of Provision For Bad & Doubtful Debts I) Disallowance Of Provision For Long Term Service Award Disallowance Of Expenditure U/S. 14A Of The Act Ii) Page 2 Of 67

For Appellant: Shri Percy Pardiwala, AdvocateFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru
Section 14ASection 35Section 37Section 43BSection 80J

…of the ld AR that no interest cost is incurred by the assessee for the purpose of earning exempt income warranting any disallowance. We notice that the similar issue was considered by Hon’ble Karnataka High Court in the case of CIT Vs. Micro Labs Ltd. (2016) 383 ITR 490, where it was held that no disallowance out of interest expenditure is called for. The relevant extract of the observations made by Hon’ble Karnataka High Court in the above said case is as below “40. We have heard the rival submissions. A copy of the availability of funds and investments made was filed before us which is at pages 38 to 42 of the…

JCIT (OSD), Circle 14, Pune vs. Kumar Builder Mumbai Realty Private Limited, Pune

In the result, the appeal filed by the Revenue in ITA

ITA 22/PUN/2020[2014-15]Status: DisposedITAT Pune22 Aug 2022AY 2014-15

Bench: Shri Inturi Rama Rao & Shri S. S. Viswanethra Ravisl.

For Appellant: Shri Nikhil S. PathakFor Respondent: Shri Abhinay Kumbhar &
Section 143(3)Section 14ASection 36(1)(iii)Section 43B

…h situation section 14A of the Act would not be applicable. Similar views have been expressed by other High Courts in CIT v. Suzlon Energy Ltd. [2013] 33 taxmann.com 157/215 Taxman 272/354 ITR 630 (Guj.), CIT v. Microlabs Ltd. [2017] 79 taxmann.com 365/[2016] 383 ITR 490 (Kar.) and CIT v. Max India Ltd. [2016] 75 taxmann.com 268/388 ITR 81 (Punj. & Har.). Mr. S Ganesh the learned Senior Counsel while citing these cases from the High Courts have further pointed out that those judgments have attained finality. On reading of these judgments, we are of the considered opinion that the High Courts have correctly interp…

JCIT (OSD), Circle 14, Pune vs. Kumar Urban Development Private Limited, Pune

In the result, the appeal filed by the Revenue in ITA

ITA 21/PUN/2020[2014-15]Status: DisposedITAT Pune22 Aug 2022AY 2014-15

Bench: Shri Inturi Rama Rao & Shri S. S. Viswanethra Ravisl.

For Appellant: Shri Nikhil S. PathakFor Respondent: Shri Abhinay Kumbhar &
Section 143(3)Section 14ASection 36(1)(iii)Section 43B

…h situation section 14A of the Act would not be applicable. Similar views have been expressed by other High Courts in CIT v. Suzlon Energy Ltd. [2013] 33 taxmann.com 157/215 Taxman 272/354 ITR 630 (Guj.), CIT v. Microlabs Ltd. [2017] 79 taxmann.com 365/[2016] 383 ITR 490 (Kar.) and CIT v. Max India Ltd. [2016] 75 taxmann.com 268/388 ITR 81 (Punj. & Har.). Mr. S Ganesh the learned Senior Counsel while citing these cases from the High Courts have further pointed out that those judgments have attained finality. On reading of these judgments, we are of the considered opinion that the High Courts have correctly interp…

JCIT (OSD), Circle 14, Pune vs. Kumar Urban Development Private Limited, Pune

In the result, the appeal filed by the Revenue in ITA

ITA 20/PUN/2020[2013-14]Status: DisposedITAT Pune22 Aug 2022AY 2013-14

Bench: Shri Inturi Rama Rao & Shri S. S. Viswanethra Ravisl.

For Appellant: Shri Nikhil S. PathakFor Respondent: Shri Abhinay Kumbhar &
Section 143(3)Section 14ASection 36(1)(iii)Section 43B

…h situation section 14A of the Act would not be applicable. Similar views have been expressed by other High Courts in CIT v. Suzlon Energy Ltd. [2013] 33 taxmann.com 157/215 Taxman 272/354 ITR 630 (Guj.), CIT v. Microlabs Ltd. [2017] 79 taxmann.com 365/[2016] 383 ITR 490 (Kar.) and CIT v. Max India Ltd. [2016] 75 taxmann.com 268/388 ITR 81 (Punj. & Har.). Mr. S Ganesh the learned Senior Counsel while citing these cases from the High Courts have further pointed out that those judgments have attained finality. On reading of these judgments, we are of the considered opinion that the High Courts have correctly interp…

M/S. Onmobile Global Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 5(1)(2), Bengaluru

In the result, both these appeals are partly allowed

ITA 2560/BANG/2019[2015-16]Status: DisposedITAT Bangalore10 Aug 2022AY 2015-16

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 14ASection 234BSection 244ASection 32

…bstantiate the fact that the assessee is have enough own funds for making investments it is clear that the assessee has sufficient own funds which exceeds the investments. 36. The Hon'ble jurisdictional High Court in the case of CIT vs Microlabs Ltd., [2016] 383 ITR 490 (Kar) has held that - 40. We have heard the rival submissions. A copy of the availability of funds and investments made was filed before us which is at pages 38 to 42 of the assessee's paperbook and the same is enclosed as ANNEXURE- IT(TP)A Nos.139 & 2560/Bang/2019 Page 27 of 40 III to this order. It is clear from the said statement that the a…

M/S Onmobile Global Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle-5(1)(2), Bangalore

In the result, both these appeals are partly allowed

ITA 139/BANG/2019[2014-15]Status: DisposedITAT Bangalore10 Aug 2022AY 2014-15

Bench: Shri George George K. & Ms. Padmavathy S

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru
Section 143(3)Section 14ASection 234BSection 244ASection 32

…bstantiate the fact that the assessee is have enough own funds for making investments it is clear that the assessee has sufficient own funds which exceeds the investments. 36. The Hon'ble jurisdictional High Court in the case of CIT vs Microlabs Ltd., [2016] 383 ITR 490 (Kar) has held that - 40. We have heard the rival submissions. A copy of the availability of funds and investments made was filed before us which is at pages 38 to 42 of the assessee's paperbook and the same is enclosed as ANNEXURE- IT(TP)A Nos.139 & 2560/Bang/2019 Page 27 of 40 III to this order. It is clear from the said statement that the a…

M/S Centaur Pharmaceuticals Pvt Ltd, Mumbai vs. ITO 14 (1)(3), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 7401/MUM/2019[2013-14]Status: DisposedITAT Mumbai04 Aug 2022AY 2013-14

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

For Appellant: Shri Vishwas MehendaleFor Respondent: Shri S.N. Kabra
Section 143(2)Section 35

…m before Hon.CIT-A stands corrected at Rs. 1,137.89 lacs instead of Rs.1,364.68 lacs as mentioned in CIT-A Order. #7 Appellants seek relief of Rs.796.87 lacs which has been worked out on the basis of the Decision of lion Karnataka HC in case of Microlabs Ltd. 383 ITR 490. and Hon. Bangalore ITAT in case of Bosch I id [2017] 87 taxmann.com 351 10. Ld. AR submitted that, Assessing Officer and Ld.CIT(A) restricted deductions u/s. 35(2AB) of the Act to the extent of DSIR certificate issued in Form 3CL. He brought to our notice the decision of the Hon'ble High Court and accordingly, he submitted that the deduction u/…

M/S Glenmark Pharmaceuticals Ltd, Mumbai vs. DCIT (Ltu)-1, Mumbai

Appeals are disposed off

ITA 7933/MUM/2019[2010-11]Status: DisposedITAT Mumbai18 Jul 2022AY 2010-11

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Vijay Mehta, ARFor Respondent: Shri O P Sharma, DR
Section 07Section 115Section 115JSection 143Section 147Section 30tSection 35

…the amount of R and D expenditure incurred and not by R&D income is in accordance with the provisions of the act. Hence, the order u/s 263 of the act was quashed. 025. We have also been shown that honourable Karnataka High Court in CIT versus micro labs Ltd 383 ITR 490, the guidelines of DSIR are extracted in paragraph number 3 which speaks that only when certain assets are used for research and development activities, which have been sold, the R&D expenditure should be reduced from the sales realization or arising out of asset sold. Therefore, it ITA Nos. 7742, 7582, 7933/Mum/2019 CO No. 62/Mum/2021 Glenmark P…

ACIT (Ltu-1), Mumbai vs. Glenmark Pharmaceuticals Ltd, Mumbai

Appeals are disposed off

ITA 7742/MUM/2019[2009-10]Status: DisposedITAT Mumbai18 Jul 2022AY 2009-10

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Vijay Mehta, ARFor Respondent: Shri O P Sharma, DR
Section 07Section 115Section 115JSection 143Section 147Section 30tSection 35

…the amount of R and D expenditure incurred and not by R&D income is in accordance with the provisions of the act. Hence, the order u/s 263 of the act was quashed. 025. We have also been shown that honourable Karnataka High Court in CIT versus micro labs Ltd 383 ITR 490, the guidelines of DSIR are extracted in paragraph number 3 which speaks that only when certain assets are used for research and development activities, which have been sold, the R&D expenditure should be reduced from the sales realization or arising out of asset sold. Therefore, it ITA Nos. 7742, 7582, 7933/Mum/2019 CO No. 62/Mum/2021 Glenmark P…

ACIT (Ltu-1), Mumbai vs. Glenmark Pharmaceuticals Ltd, Mumbai

Appeals are disposed off

ITA 7582/MUM/2019[2010-11]Status: DisposedITAT Mumbai18 Jul 2022AY 2010-11

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm

For Appellant: Shri Vijay Mehta, ARFor Respondent: Shri O P Sharma, DR
Section 07Section 115Section 115JSection 143Section 147Section 30tSection 35

…the amount of R and D expenditure incurred and not by R&D income is in accordance with the provisions of the act. Hence, the order u/s 263 of the act was quashed. 025. We have also been shown that honourable Karnataka High Court in CIT versus micro labs Ltd 383 ITR 490, the guidelines of DSIR are extracted in paragraph number 3 which speaks that only when certain assets are used for research and development activities, which have been sold, the R&D expenditure should be reduced from the sales realization or arising out of asset sold. Therefore, it ITA Nos. 7742, 7582, 7933/Mum/2019 CO No. 62/Mum/2021 Glenmark P…

M/S. Hemavathy Power & Light Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 3(1)(1), Bangalore

In the result, the appeals of the assessee for assessment year

ITA 1820/BANG/2019[2012-13]Status: DisposedITAT Bangalore23 Jun 2022AY 2012-13

Bench: Shri N.V. Vasudevan, Vice Preseident & Ms. Padmavathy S

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Smt. Priyadarshini Baseganni, Addl.CIT(DR)(ITAT)
Section 32Section 32(1)(ii)Section 36(1)(iii)Section 68

…o 2719/Bang/2018 & 1820/Bang/2019 Page 10 of 13 the assessee has used own funds for giving interest free advances to sister concerns. We notice that the similar issue was considered by Hon’ble Karnataka High Court in the case of CIT Vs. Micro Labs Ltd. (2016) 383 ITR 490, where it was held that no disallowance out of interest expenditure is called for. The relevant extract of the observations made by Hon’ble Karnataka High Court in the above said case is as below “40. We have heard the rival submissions. A copy of the availability of funds and investments made was filed before us which is at pages 38 to 42 of th…

M/S Hemavathy Power & Light Pvt Ltd, Bangalore vs. Income Tax Officer Ward-3(1)(3), Bangalore

In the result, the appeals of the assessee for assessment year

ITA 2719/BANG/2018[2014-15]Status: DisposedITAT Bangalore23 Jun 2022AY 2014-15

Bench: Shri N.V. Vasudevan, Vice Preseident & Ms. Padmavathy S

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Smt. Priyadarshini Baseganni, Addl.CIT(DR)(ITAT)
Section 32Section 32(1)(ii)Section 36(1)(iii)Section 68

…o 2719/Bang/2018 & 1820/Bang/2019 Page 10 of 13 the assessee has used own funds for giving interest free advances to sister concerns. We notice that the similar issue was considered by Hon’ble Karnataka High Court in the case of CIT Vs. Micro Labs Ltd. (2016) 383 ITR 490, where it was held that no disallowance out of interest expenditure is called for. The relevant extract of the observations made by Hon’ble Karnataka High Court in the above said case is as below “40. We have heard the rival submissions. A copy of the availability of funds and investments made was filed before us which is at pages 38 to 42 of th…

M/S Hemavathy Power & Light Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-3(1)(2), Bangalore

In the result, the appeals of the assessee for assessment year

ITA 2718/BANG/2018[2013-14]Status: DisposedITAT Bangalore23 Jun 2022AY 2013-14

Bench: Shri N.V. Vasudevan, Vice Preseident & Ms. Padmavathy S

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Smt. Priyadarshini Baseganni, Addl.CIT(DR)(ITAT)
Section 32Section 32(1)(ii)Section 36(1)(iii)Section 68

…o 2719/Bang/2018 & 1820/Bang/2019 Page 10 of 13 the assessee has used own funds for giving interest free advances to sister concerns. We notice that the similar issue was considered by Hon’ble Karnataka High Court in the case of CIT Vs. Micro Labs Ltd. (2016) 383 ITR 490, where it was held that no disallowance out of interest expenditure is called for. The relevant extract of the observations made by Hon’ble Karnataka High Court in the above said case is as below “40. We have heard the rival submissions. A copy of the availability of funds and investments made was filed before us which is at pages 38 to 42 of th…

M/S Hemavathy Power & Light Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-11(4), Bangalore

In the result, the appeals of the assessee for assessment year

ITA 2717/BANG/2018[2011-12]Status: DisposedITAT Bangalore23 Jun 2022AY 2011-12

Bench: Shri N.V. Vasudevan, Vice Preseident & Ms. Padmavathy S

For Appellant: Shri Narendra Sharma, AdvocateFor Respondent: Smt. Priyadarshini Baseganni, Addl.CIT(DR)(ITAT)
Section 32Section 32(1)(ii)Section 36(1)(iii)Section 68

…o 2719/Bang/2018 & 1820/Bang/2019 Page 10 of 13 the assessee has used own funds for giving interest free advances to sister concerns. We notice that the similar issue was considered by Hon’ble Karnataka High Court in the case of CIT Vs. Micro Labs Ltd. (2016) 383 ITR 490, where it was held that no disallowance out of interest expenditure is called for. The relevant extract of the observations made by Hon’ble Karnataka High Court in the above said case is as below “40. We have heard the rival submissions. A copy of the availability of funds and investments made was filed before us which is at pages 38 to 42 of th…

Suyash Auto Press Components and Assemblys Pvt. Ltd, Pune vs. Assistant Commissioner of Income-Tax, Circle -6, Pune

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 564/PUN/2020[2016-17]Status: DisposedITAT Pune13 Jun 2022AY 2016-17

Bench: Or During The Course Of Hearing Of The Case.

For Appellant: Shri Rohit TapadiaFor Respondent: Shri M.G. Jasanani
Section 14A

…the amount of investment, then no disallowance of interest can be made u/s 14A. Similar view has been taken by the Hon'ble Bombay High Court in CIT vs. HDFC Bank Ltd. (2014) 366 ITR 515 (Bom). The Hon'ble Karnataka High Court in CIT & Anr vs. Microlabs (2016) 383 ITR 490 (Kar) has also held that when investments are made from a common pool and non-interest bearing funds are more than the investment in tax free securities, no disallowance of interest expenditure u/s 14A can be made. Respectfully following the precedents, we order to delete the disallowance under Rule 8D(2)(ii) to the tune of Rs.8,29,597/-. 6. In s…

M/S Tejas Networks Limited, Bangalore vs. Assistant Commissioner of Income Tax Central Circle-2(1), Bangalore

In the result, the appeals filed by the assessee are partly allowed

ITA 205/BANG/2018[2013-14]Status: DisposedITAT Bangalore31 May 2022AY 2013-14

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm It(Tp)A No.764/Bang/2017 : Asst.Year 2012-2013 It(Tp)A No.205/Bang/2018 : Asst.Year 2013-2014 M/S.Tejas Networks Limited The Assistant Commissioner Plot No.25, Jp Software Park Of Income-Tax, Circle – 1, Ltu V. Bangalore. Electronic City Phase-I Hosur Road, Bangalore – 560 100. Pan : Aabct1670M. (Appellant) (Respondent) Appellant By : Sri.S.Annamalai, Advocate Respondent By : Sri.Sumer Singh Meena, Cit-Dr Date Of Pronouncement : 31.05.2022 Date Of Hearing : 19.05.2022 O R D E R Per George George K, Jm : These Appeals At The Instance Of The Assessee Are Directed Against Final Assessment Orders Dated 31.01.2017 & 23.11.2017, Passed U/S 143(3) R.W.S. 144C Of The I.T.Act. The Relevant Assessment Years Are 2012-2013 & 2013- 2014. We Shall First Adjudicate It(Tp)A No.764/Bang/2017 Pertaining To The Assessment Year 2012-2013. It(Tp)A No.764/Bang/2017 (Asst.Year 2012-2013) 2. The Brief Facts Of The Case Are As Follows: The Assessee Is A Company Engaged In The Business Of Design, Development, Manufacture Of Telecommunication Equipments. For The Assessment Year 2012-2013, The Return

For Appellant: Sri.S.Annamalai, AdvocateFor Respondent: Sri.Sumer Singh Meena, CIT-DR
Section 143(2)Section 143(3)Section 92BSection 92C

…by the assessee stand at Rs.4.58 crores only. Admittedly, the own funds available with the assessee is in far excess of the investments made by the assessee. Accordingly, as per decision rendered by Hon’ble Karnataka High Court in the case of Micro Labs Ltd. 383 ITR 490, no disallowance out of interest expenditure is called for. Accordingly, we confirm the decision rendered by Ld. CIT(A) in deleting this disallowance for the reasons stated above. 24. In the result, the appeal filed by the assessee is treated as allowed and the appeal of the revenue is dismissed.” 7.1 We have heard rival submissions and perused t…