2013 (9) TMI 1062

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....nd thereby applying rule 8D of the Income Tax Rules, 1961, by rejecting the appellants contention that appellant was in position of sufficient without interest bearing funds and assessing officer has failed to establish any nexus between exempt income and expenditure incurred". 3. The short issue in controversy is disallowance made u/s.14A by the Assessing Officer applying Rule 8D. 4. Facts revealed from the record are as under. The assessee is a cooperative society engaged in the banking business. The AO has noted that the assessee has received the income from dividend on mutual funds amounting to Rs. 31,49,377/-. The assessee has also investments in treasury securities, tax free bonds and equity bonds and shares. The assessee has claime....

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....ule 8D of the I.T. Rules, 1962. The assessee carried the issue before the Ld.CIT(A) but without success as the addition made by the AO by making the disallowance out of expenditure claimed by the assessee was confirmed. Now the assessee is in appeal before us. 6. We have heard the rival submissions of the parties and perused the record. The Ld. Counsel for the assessee relied on the following decisions in support of his argument that unless the nexus is established no disallowance can be made u/s.14A(2) also. (1) CIT Vs. Reliance Utilities and Power Ltd. 313 ITR 340 (Bom.) (2) CIT Vs. Hero Cycles Ltd. 323 ITR 518 (P&H) (3) CCI Ltd. Vs. JCIT 250 CTR 291 (Kar.) (4) Apoorva Patni Vs. Addl.CIT 54 SOT 09 (Pune) (URO) 6.1 Per contra, the Ld....