2014 (7) TMI 1111
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....ount of salary, telephone etc have been related to activities for earning exempt income. 2. On the facts and in the circumstances of the case and in law, whether the Ld.CIT(A) was justified in ignoring the provisions of Section 14A (3) wherein section 14A can be invoked even in cases where an assessee claims that no expenditure had been incurred in relation to exempt income. 3. The appellant prays that the order of the CIT(Appeals) on the above grounds be set aside and that of the Assessing Officer be restored. 4. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 2. Assessee, an individual....
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....ted to the capital account of the assessee, that the expenses related to salary, telephone and other administrative expenses were incurred by him for his professional income, that disallowance made by the AO was without any basis and without establishing any nexus. After considering the submissions of the assessee and the assessment order he held that the provisions of section 14A (1) read with section 14A (2) provided that for the purpose of total income computed under that chapter, no deduction would be allowed in respect of expenditure incurred by the assessee in relation to income which did not form part of total income under that Chapter, that the AO would determine the amount of expenditure incurred in relation to exempt income if he....
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....nal activity, that he had paid salary of Rs. 8,02,836/-, telephone charges of Rs. 1.91 lakhs and had incurred establishment expenditure of Rs. 3.06 lakhs, that the disallowance made u/s.14A exceeded the amount debited to the Income & Expenditure Account. He relied upon the matter of S P Bharucha (ITA/3889/Mum/2011-AY.2008-09, dtd.25.07.2012) 5. We have heard the rival submission and perused the material before us.We find from the audit report that the expenses in respect of exempt income was shown at Rs. Nil, that the assessee had debited direct expenses on account of dematerialisation and STT in the capital account and in the profit and loss account, that AO had presumed that the assessee had must have incurred some expenditure under the ....