2014 (1) TMI 1286

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.... issue raised is that Ld. Commissioner of Income Tax (A) erred in sustaining the disallowance u/s. 14A read with Rule 8D amounting to Rs. 40,46,025/-. 3. The assessee in this case is a Public Limited Company and is engaged in the business of development, purchase, sale and deals in all type of software and firmware. During the year under consideration, the assessee showed the dividend income of mutual funds amounting to Rs. 5,82,291/- under STPI Unit and Rs. 14,70,277/- from Non STPI unit, totaling of Rs. 20,52,568/- and claimed the said income as exempt u/s. 10(35) of the Act. 3.1 Assessing Officer asked the assessee company to explain as to why the disallowance u/s. 14A of the I.T. Act read with Rule 8D of the I.T. Rules should not ....

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....2) of the I.T. Rules. Accordingly, Assessing Officer disallowed a sum of Rs. 40,46,025/- as disallowance under section 14A. 4. Upon assessee's appeal Ld. Commissioner of Income Tax (A) considered the submissions. He referred to several case laws and concluded that Assessing Officer was justified to make the disallowance of Rs. 40,46,025/- and affirmed the action of the Assessing Officer. 5. Against the above order the Assessee is in appeal before us. 6. We have heard the rival contentions and perused the records. We find that in this case the Assessing Officer has noted that assessee has received a dividend income of Rs. 20,52,628/- and claimed the same as exempt income. Assessee in this regard has submitted before the Assessing Of....

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....e assessee in earning the dividend income from mutual funds which is exempted and hence, no disallowance is warranted. 8. We find that the above submissions of the assessee have not at all been reflected or addressed in the Assessing Officer's order or the remand report. Assessing Officer's order does not consider these aspects in any manner. Assessing Officer simply stated that the reply of the assessee is silent in this regard, but, we find that the assessee has made elaborate submissions before the Ld. Commissioner of Income Tax (A). 8.1 Assessee has also filed the bank statements before the Ld. Commissioner of Income Tax (A) and requested for admission of the same. Ld. Commissioner of Income Tax (A) has also sought remand report f....