TaxTMI 
TaxTMI 
2015 (10) TMI 736
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.... 2. The first issue in this appeal of revenue is against the order of CIT(A) deleting the disallowance made by AO on account of exempt income by invoking the provision of Section 14A of the Act. For this, revenue has raised following ground No 1: "1.That Ld. CIT[A] has erred in law s well as on facts by deleting the addition of Rs. 13,41,749/- on account of U/s 14A." 3. Briefly stated facts are that the assessee has earned dividend income of Rs. 7,352/- on mutual fund and dividend of Rs. 40,678/- on shares investment, claiming the aggregated exempted income of Rs. 48,030/-. The Assessing Officer disallowed the expenses relatable exempted income by invoking the provision of Sec. 14A of the Act read with Rule 8D of the I.T. Rule,....
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....ervations of the Assessing Office in the assessment order and submissions of the appellant. The investment in shares was made prior to procurement of loans and a security deposit was given of Rs. 11.9 crores to M/s East Commercial Pvt. Ltd. The entire loan had direct nexus with the taxable income. The appellant had its own sufficient funds for the investment and the loan amount has not been invested in the investments. 6. However, there are other indirect expenses amounting to Rs. 13,43,931/- as per schedule 6 of the Tax Audit Report. The appellant has not disallowed any expenses on account of administrative and establishment expenses. The Assessing Officer has calculated the eddies as per Rule 8D since the appellant is unable to e....
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..../- on shares investment aggregating to Rs. 48,030/- as exempted income. The Assessing Officer has calculated disallowance @ 0.5% amounting to Rs. 90,825/-. The appellant has expenditure as Placement Fee on Mutual Fund of Rs. 50,000/-; expenses on share transactions of Rs. 1,798 and Interest Paid on Mutual Fund of Rs. 4,150 and thereby totalling to Rs. 55,948/-. The appellant has claimed these expenses in the Profit and Loss Account and has not disallowed on the basis that the said investments have not yielded any income during the assessment year 2009-10. The plea of the appellant is not tenable since it is not a rule whether any investment yield an income or not but the expenses incurred on investments which may even yield exempted income ....
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....ent i.e. purchase of share and mutual funds. Once the this is the position, the same was put before to Ld. DR but he could not controvert the findings of CIT(A) that assessee has no funds available or the investment in share or mutual fund is out of borrowed funds. In view of the facts and circumstances of the case, we confirm the order of CIT(A). This issue of Revenue's appeal is dismissed. 5. Next issue in this appeal of Revenue is against the order of CIT(A) in deleting the addition of commission expenses. For this, Revenue has raised following ground No.2:- "2. That Ld. CIT[A]has erred in law as well as on facts by deleting the addition of Rs. 80,48,713/- on account of commission." 6. Briefly stated facts are that AO ....
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....ed into agreement with the commission agents, and, the commission paid as per the terms of the agreement. Copy of bills raised by the commission agents was produced before the AO. The payments were made through banking channel, and, tax was also deducted at source. The books of accounts, bank statements, and, other relevant documents were produced, and, the AO has not found any defects in such books or documents. In the remand report, the AO has admitted that the nature of services rendered has been mentioned in the agreement, and, the commission agents have also confirmed rendering of services to justify the claim of commission. On the other hand, there is no material on record to show anything that could cast suspicion or doubt about the ....