TaxTMI 
TaxTMI 
2016 (2) TMI 236
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....The assessee has raised two grounds i.e (i) disallowance u/s.14A of the Act and (ii) disallowance of setting off of loss u/sec.10AA of the Act. 3. The Brief facts of the case are that the assessee company is engaged in the business of manufacturing of cold forged auto parts and filed return of income on 23.09.2008 declaring total income of ;6,08,73,560/- after claiming deduction u/s.10B of the Act. The Return was processed u/s.143(1) of the Act and was selected for scrutiny and notice u/s.143(2) was issued. In compliance to the notice the ld.AR of the assessee appeared from time to time and filed details. Further, the ld. Authorised Representative also furnished details of international transaction entered with the Associated Enterprises a....
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....nd relied on the decisions of Supreme Court in the case of Rajasthan State Warehousing Corporation vs. CIT (242 ITR 450) and Punjab and Haryana High Court in the case of CIT vs. Hero Cycles Ltd (323 ITR 518) and submitted that no expenditure is incurred for earning above exempt income were no disallowance of expenditure was worked out. Further, Rule 8D has come into effect from 24.03.2008 for the assessment year 2008-2009 and relied on decisions and applicability of law. But, the Assessing Officer has calculated disallowance u/s.14A under Rule 8D relying on judicial decisions and attributed expenditure under Rule 8D ;46,82,087/- and added to the returned income. The Assessing Officer also further not allowed the set off of loss of the asses....
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....ng the order of the Assessing Officer. Aggrieved by the order of the CIT(A) the assessee has filed an appeal before the Tribunal. 5. Before us, the ld. Authorised Representative reiterated his submissions made in assessment proceedings and in the appellate proceedings. In respect of dividend income the ld. Authorised Representative demonstrated that the company has made investments in shares and mutual funds out of surplus funds available and no part of borrowed funds have been utilized for the purpose of investment and during the financial year 2007-2008. The assessee company has received an amount of ;1,64,06,932/- as dividend income and further exhibited that there is no expenditure incurred in earning such dividend income. Therefore, t....