2015 (10) TMI 1488

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....delay which is accompanied with the affidavit of the assessee explaining that the assessee was under bonafide belief that the limitation period for filing the appeal before the Tribunal was of 90 days. Under this bonafide belief, the short delay of 30 days has occurred in preferring the present appeal. 2.1 Considering the submissions of the assessee as well as the shortness of the delay period, we condone the delay in preferring the present appeal and proceed to decide the same on merits. 3. The assessee has raised two effective issues through her grounds of appeal. Ground Nos.1 to 3 relate to the issue of disallowance of Rs. 2,85,860/- under section 14A of the Income Tax Act on account of expenditure incurred for earning of exempt income....

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....IT(A) on this issue, the assessee has come in appeal before us. 6. We have heard the rival contentions of the Ld. Representatives of both the parties and have also gone through the records. The Ld. A.R. of the assessee has stated that for earning of exempt income like interest on tax free bonds, dividend from mutual funds etc., it generally do not require incurring of any expenditure. He has further stated that investment in mutual fund was carried out through agency of distributors and that most of the investments were made in earlier years and as such for the year under consideration, no disallowance was attracted. On the other hand, the Ld. D.R. has relied upon the findings of the lower authorities. 7. We have considered the submissio....

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.....934/2011) decided on 08.01.13 has upheld the order of the Tribunal directing the AO to restrict the disallowance to the extent of 2% of the total exempt income earned by the assessee. In view of the above, the straightway application of rule 8D in the case of the assessee by the lower authorities is not sustainable. Taking into consideration the overall facts and circumstances of the case especially the nature of investments made by the assessee and further that most of the investments were made in earlier years, in our view, the expenses equal to 2% of the exempt income earned by the assessee would constitute a reasonable disallowance and the same is restricted to that extent accordingly. This ground of appeal of the assessee is thus par....