Dy. CIT vs B E Billimoria & Co Ltd
The assessee being resident corporate assessee was assessed u/s. 143(3). During assessment proceedings, it transpired that the assessee sold an office premises and offered short-term capital gains. However since the stamp duty value of the premises was Rs.20.59 Crores, Ld. AO invoking the provisions of Sec.50C, added the differential amount of Rs.1.59 Crores to the income of the assessee. The second disallowance made by Ld. AO was interest and indirect expenditure disallowance u/s 14A read with Rule 8D(2)(ii) & 8D(2)(iii).
The interest disallowance u/s 14A was deleted since the assessee’s interest free funds were found to be more than the investments and therefore no additions thereof were justified in term of the decision of Hon’ble Bombay High Court in CIT V/s HDFC Bank Ltd. The interest disallowance u/s 14A would not survive since the fact the assessee had sufficient interest free funds to make the investment remain uncontroverted. The indirect expenditure was already been offered by the assessee in its computation of income and therefore the same could not be disallowed again. Hence, Mumbai ITAT found no reason to interfere in the impugned order on any of the issue. The appeal stands dismissed.