2016 (2) TMI 514

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....er referred to as the 'Act'). 2. The only issue to be decided in this appeal is as to whether in the facts and circumstances of the case, the disallowance u/s 14A of the Act could be made in the sum of Rs. 12,24,192/-. 3. The brief facts of this issue is that the assessee had derived the following exempt income :- Dividend from Mutual Funds 1,61,72,775 Dividend from Shares 14,19,096 Tax free interest 3,84,725   1,79,76,596   The assessee voluntarily disallowed a sum of Rs. 4,67,484/- u/s 14A of the Act in the revised computation of income filed before the completion of assessment proceedings together with workings for the same. The Learned AO ignoring the said workings, directly proceeded to mak....

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....law, the Learned Commissioner of Income Tax (Appeals) - VI, Kol has erred in disregarding the order of Learned CIT(A) - VI, Kolkata in respect of assessment years 2006-07 and 2007-08 in the appellant's own case (Appeal No. 850/CIT(A)- VI/Cir-6/Kol/2009-10 and Appeal No. 569/CIT(A)-VI/Cir-6/Kol/2008- 09 respectively and Orders dated 29/11/2010) in which 1 % of the taxfree income was held to be reasonable expenses for the purpose of disallowances under section 14A. 4. That, on facts as well as on law, the Learned Commissioner of Income Tax (Appeals)-VI, Kol has erred in disallowing 0.5% of taxfree investments in accordance with the provision of Rule 8D read with section 14A(2) of the Income Tax Act, 1961 even though the amount of....

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....faction in terms of Rule 8D(1) of the Rules, the Learned AO cannot proceed to invoke Rule 8D(2) of the Rules. The Learned AO without prejudice to his main argument, argued that even assuming if disallowance u/s 14A is made in terms of Rule 8D of the Rules, then only the investments yielding exempt income should alone be considered for the purpose of Rule 8D of the Rules. In response to this, the Learned DR vehemently supported the orders of the lower authorities. 5. We have heard the rival submissions and perused the materials available on record. We find that the assessee had voluntarily disallowed a sum of Rs. 4,67,484/- u/s 14A of the Act with some basis. We find that the assesee does not have any debt funds and hence no interest is d....

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.... CIT vs R.E.I. Agro Ltd in GA 3022 of 2013 in ITAT 161 of 2013 dated 23.12.2013 rendered by Calcutta High Court "The Assessing Officer also disallowed the expenditure under section 14A of the Income Tax Act, 1961 without first recording that he was not satisfied with the correctness of the claim as regards the claim that "no expenditure" was made by the assessee. Challenging the order of the tribunal, the present appeal has been filed. We have heard Mr.Bhowmik and are of the opinion that no point of law has been raised. Therefore, this appeal is dismissed". 5.1. We also find lot of force in the alternative arguments of the Learned AR that only investments yielding exempt income should be considered for the p....