2014 (1) TMI 287

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....issues per its two grounds, which shall take up in seriatim. The first issue is in respect of the confirmation of disallowance in respect of training expenses, claimed in the sum of Rs. 10,00,550/- by the assessee-company, in respect of its director, Ms. Protima Wagh, who is also the daughter of the Chairman/promoter- director, Sri S.M. Wagh, for pursuing a study course leading to the degree of Bachelor of Science and Master of Science (in Biotechnology), in USA. 3.1 Opening the arguments for and on behalf of assessee, it was submitted by the learned AR, its counsel, that this is a subsisting issue in the assessee's case; the educational course under the reference being for a period of five years, i.e., from 2004 to 2009. The same came bef....

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....s well as enable the assessee to plead its case along the same lines for this year as well. We decide accordingly. 5. The second and only other issue is the disallowance in the sum of Rs. 3,16,056/- u/s. 14A read with rule 8D, having been since confirmed by the first appellate authority. This issue, again, it was submitted by the ld. AR, was present in the assessee's case for AY 2007-08, and stood restored by the tribunal to the file of the assessing authority for fresh adjudication. Accordingly, he would press for a like course being adopted by it for the current year as well. The ld. DR, on the other hand, would bring to our notice that rule 8D is mandatory for the current year, so that there is no infirmity in the orders of the authorit....

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....arned by the assessee, so that a disallowance with reference to the same, in a reasonable proportion, could be made by the tribunal itself. 6. We have heard the parties, and perused the material on record. 6.1 As regards the legal issue; the assessee claiming non-compliance of the condition of Section 14A (2), so that no disallowance u/s.14A(1) could be made, no doubt the same is a prerequisite where the assessing authority proceeds to determine the expenditure incurred by the assessee in relation to income which does not form part of its total income. So, however, the initial onus is on the assessee to exhibit, with reference to its accounts, that it has not incurred any expenditure, as being claimed by it in the instant case, with the a....

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...., by prescribing a uniform method for the same. As such, until and unless the assessee is able to factually establish that no part of the borrowed funds has been utilized for investment in tax-free securities, disallowance qua the interest expenditure incurred would follow, given the mandate of r. 8D(2)(ii). As regards incurring of indirect expenditure, again, the initial onus is on the assessee, which has not been discharged in the instant case. The said expenditure may assume many forms, with, in fact, the decision making in respect thereof (investment) being located at the higher echelons of the management, and which can only be upon expending time and resources. In a given case, the services of a portfolio manager would have been avail....