Sandeep Singh Karhail ORDER
Sandeep Singh Karhail, Member (J)
1. The present appeal has been filed by the assessee challenging the impugned order dated 31/03/2023, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals), Delhi, National Faceless Appeal Centre, ["learned CIT(A)"], for the assessment year 2014-15.
2. In its appeal, the assessee has raised the following grounds:-
"1. The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as "the CIT(A)") erred in upholding the disallowance of interest of Rs 80,08,92,309/- and expenses of Rs. 8,21,54,351 under section 14A of the Income-tax, 1961 (hereinafter referred to as "the Act") r.w. Rule 8D of the Income Tax Rules, 1962 (hereinafter referred to as "the Rules") to normal provisions of the Act as well as for computation of book profit under section 115JB of the Act. The reasons given by him for doing so are wrong. contrary to the facts of the case and provision of law;
2. The CIT(A) failed to appreciate that disallowance of the said interest and expenses under section 14A of the Act read with Rule 8D without proving any nexus of expenses incurred with investments and/or exempt income and without recording proper satisfaction is bad in law;
3. The CIT(A) in upholding the action of the Assessing Officer failed to appreciate that the investments were out of own funds and therefore disallowance of interest of Rs. 80,08,92,309/- under section 14A read with Rule 8D(2)(ii) is uncalled for;
4. The above grounds/sub-grounds are without prejudice to each other,
5. The appellant craves the leave to add, amend or alter all or any of the grounds of appeal."
3. The only dispute raised by the assessee is against disallowance made under section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 ("the Rules").
4. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is a private limited company and is engaged in the business of providing wireless services, electronics telecommunication, GSM/GPRS modems, buying, selling advertising space in print media and subscriber management services for media companies. For the year under consideration, the assessee filed its return of income on 29/11/2014 declaring a total income of Rs. Nil, after claiming carry forward losses of Rs.85,96,49,128. The return filed by the assessee was selected for scrutiny and statutory notices under section 143(2) read with section 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, it was observed that the assessee has earned a dividend income of Rs.48,28,05,816, which was claimed as exempt under section 10(34) of the Act. From the profit and loss account, it was observed that the assessee has debited an amount of Rs.84,05,56,839 as interest on the loan paid. Further, in the balance sheet, the assessee has shown a total investment of Rs.1643,08,70,195. However, the assessee had suo moto disallowed only Rs.8,21,54,351, i.e. 0.5% of average investment under sec........