TaxTMI 
TaxTMI 
2016 (2) TMI 787
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....rder without taking into consideration all the facts before him which make it unreasonable, unjustified and bad in law. 2. That the action on the part of the assessing officer is highly arbitrary, improper and without application of mind, unreasonable, unjustified and bad in law and deserves to be deleted, so that proper justice can be given to the applicant. 3. That on facts and circumstances of the case, the learned assessing officer has erred while making addition on account of Section 14A of Rs. 1,41,206/- ,which is illegal, unjustified and required to be deleted." 2. Brief facts that emerge from the order of the ld. Assessing Officer are as under:- The assessee filed its return of income for the year under consi....
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....ing funds have not been used in previous year for making such investment as the assessee itself have sufficient capital and reserve funds. 4.2.Ld. AR demonstrated from the profit and loss account that the total capital and free reserves as on 31.3.2009 was amounting to Rs. 15,80,49,522,/-, the opening balance of investment was Rs. 1,08,93,945/- and the closing balance of investment was Rs. 1,22,19,945/-. Ld. AR submitted that Rs. 15,21,000/- (1,08,93,945-1,22,19,954), during the year has been invested in the assessee company itself which has been made out of its own capital and free reserves. 4.3. Ld. AR submitted that any disallowance u/s 14A, therefore, should not be made in lieu of the fact that the assessee has not made any fresh ....
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....xempt from tax. Assessee's stand in not disallowing any expenditure in this regard is not acceptable though no dividend income is earned during the previous year. The ld.DR submitted that in order to disallow the expenditure it is not necessary that exempt income is earned. He submitted that as expenditure is allowed even if no income was earned in taxable income cases, in reverse case the expenditure should be disallowed though no exempt income was earned. 6. We have heard both the counsel and perused the records. We have also gone through the orders of the lower authorities, Synopsis, Paper Book filed by the assessee and the case laws relied upon by the assessee. 6.1. It is an admitted position that for the year under consideration,....
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....enditure only if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee, in respect of such expenditure in relation to income which does not form part of the total income under the said Act. Further for the year under consideration, if at all any disallowance needs to be calculated, it must be in accordance with Rule 8 D of the Act. From the computation of in the assessment order, the ld.AO has ruled out the applicability if sub clause (i) of Rule 8 D (2). He has calculated the disallowance under Rule 8 D (2) (ii) & (iii). 6.5. In the present case, the ld. AR has submitted that the assessee has earned a dividend income of Rs. 900/- from the investment in Hi....