TaxTMI 
TaxTMI 
2015 (3) TMI 57
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....Briefly stated, the facts of these grounds are that the assessee received a sum of Rs. 2,02,531/- as dividend income from shares and mutual funds, which was claimed and allowed as exempt u/s 10 of the Act. No expenditure was disallowed against this amount. On being called upon to explain as to why no disallowance was made u/s 14A read with Rule 8D, the assessee submitted its explanation which has been reproduced in the assessment order. Rejecting such submission advanced on behalf of the assessee, the AO held that the provisions of section 14A were attracted. He computed disallowance as per Rule 8D amounting to Rs. 9,46,228/-. This amount was eventually added to the total income of the assessee. The ld.CIT(A) upheld the assessment order on ....
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....y powers which the sub-ordinate authority may have in the matter." In view of this legal position emanating from the above discussed judgments of the Hon'ble Summit court, it is patent that the argument about the non-recording of satisfaction about the incurring of expenses in relation to exempt income does not hold water. 5. Now coming to the merits of the addition, it is observed that the first amount of disallowance is Rs. 8,22,725/- being the interest towards investment in shares and mutual funds yielding exempt income. In this regard, it is observed from the assessee's balance sheet that total investments made by it stand at Rs. 2.33 crore. Some of such investments yielded exempt income. When we turn to the amount of Shareholder....
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....er consideration is 2009-10, the mandate contained in Rule 8D applies as per the judgment of the Hon'ble jurisdictional High Court in the case of Maxopp Investments Ltd. Vs. CIT (2012) 347 ITR 272 (Del). We, therefore, sustain the disallowance u/s 14A at Rs. 1,23,503/-. These grounds are partly allowed. 7. Ground No.5 is against confirmation of disallowance of Rs. 42,000/- on account of prior period expenses. The assessee had shown 'Prior period expenses' in its tax audit report at Rs. 5,45,791/-. However, in the computation of income, only a sum of Rs. 5,03,791/- was added back. On being called upon to explain as to why the remaining amount of Rs. 42,000/- was not added, the assessee stated that this represented the Effluent treatment p....
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....meed, was taken into custody pursuant to an accident and the amount was paid as Advocate fee for seeking his bail. A further sum of Rs. 3,000/- was claimed as deduction as certification charges of the net worth of Directors. The AO disallowed Rs. 18,000/-. The ld.CIT(A) restricted the disallowance to a sum of Rs. 10,500/-, comprising Rs. 7,500/- out of legal fees paid to Advocate and Rs. 3,000/- paid as certification charges. 10. After considering the rival submissions and perusing the relevant material on record, we find that the Advocate's fees of Rs. 7,500/- for seeking bail in respect of the offence committed by the assessee's driver is not allowable in terms of Explanation to section 37(1) which prohibits deduction of any expenditur....