Chennai ITAT upholds Sec
14A disallowance for AYs 2011-12 & 2012-13 in respect of strategic
investments made by assessee-company in subsidiary / associate companies for
business purposes; ITAT clarifies that the holding of asset/property
under reference either as an investment or as stock-in-trade becomes
inconsequential or irrelevant for Sec 14A application, what is relevant
is not the object for which the investment was made, but the nature of income –
tax-exempt or otherwise, that arises from the investment; Remarks that
“Now, it stands to reason that if ‘investments’ forming part of the assessee’s
stock-in-trade does not preclude application of sec. 14A, investments made for
business, i.e., assuming so, would surely not.”; Further rejects assessee’s
stand that no expenditure was incurred for making strategic investments,
remarks that “the very fact that the assessee claims it as having business
implications, makes such a review imperative, entailing cost.”, upholds
disallowance of indirect expenditure as per Rule 8D(iii) ; Relies on Special
Bench ruling in Daga Capital Management P. Ltd., Mumbai ITAT ruling in DH
Securities (P.) Ltd., Bombay HC ruling Godrej & Boyce Mfg. Co. Ltd. and
Calcutta HC ruling in Dhanuka & Sons, differs from co-ordinate bench ruling
in EIH Associated Hotels Ltd. in as much as the same was without
reference to the language of the provision and the aforesaid decisions:ITAT
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