TaxTMI 
TaxTMI 
2015 (6) TMI 876
X X X X Extracts X X X X
X X X X Extracts X X X X
....under :- "(1). That on the facts and circumstances of the case and in law, the Ld.CIT(A) erred in allowing deduction of commission payment to non-executive directors when it was clearly disallowable u/s 40(a)(ia) of IT Act, 1961. (2) That on the facts and circumstances of the case and in law, the Ld.CIT(A) erred in allowing relief to the assessee u/s 14A of IT Act. Whereas AO was correct in computing disallowance u/s 14A of IT Act, 1961. (3) That the appellant craves leave to add to and/or amend, alter, modify any of the grounds before or at the time of hearing of the appeal." 3. As regards ground no.1 the brief facts of the case are that AO disallowed the commission u/s 40(a)(ia) of the Act since the TDS on the commission to the direct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Act. Thus, the appellant would be liable to deduct and pay taxes before the statutory date of filing the return of income. There is no dispute in the order of the AO that the TDS had been paid before such date. Under the circumstances, and following the decision of my predecessor in the case of Tata Ryerson Limited in Appeal No.231/CIT(A)VIII/Kol/08-09, I hold that the appellant has not contravened the provision of Section 40(a)(ia) of the I.T.Act and accordingly the AO is directed to delete the addition." 5.1. In view of the submissions made before the ld. CIT(A) by the ld. Counsel of the assessee and the arguments made by both the parties we concur with the view of the ld. CIT(A) that the assessee has paid the taxes at source before t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of the case we find no infirmity in the order of the ld. CIT(A), who has rightly deleted the addition made by AO. Thus ground No.1 of the revenue is dismissed. 6. As regards ground No.2 of the Revenue AO made disallowance of Rs. 12,98,872/- being 0.5% of average investment of Rs. 25,85,74,242/- as per Rule 8D of IT Rules. 6.1. Before the ld. CIT(A) the assessee's consul made the submissions and the ld. CIT(A) after considering the submissions restricted the disallowance to Rs. 28,428/- being 1% of exempt of dividend income of Rs. 28,42,805/- instead of total disallowance at Rs. 12,92,872/- by the AO u/s 14A of the Act. 7. We have heard the rival contentions and perused the facts of the case. The relevant findings of the ld. CIT(A) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t relation with the investments in shares. So, in view of the above discussion, the contention of the appellant is not fully acceptable that no expenditure has been incurred for earning the dividend income and in my opinion, even if Rule-8D of the Income Tax, 1962 is not applicable for the relevant assessment year, but the element of expenditure incurred for the earning of exempt income cannot be ruled out. Therefore, following the decisions of the Hon'ble Jurisdictional Tribunal in a number of cases, I restrict the disallowance to Rs. 28,428/- (being 1% of exempt dividend income of Rs. 28,42,805/-) instead of total disallowance made at Rs. 12,92,872/- by the AO u/s 14A of the Act. Thus this ground of appeal is partly allowed." 7.1. T....