TaxTMI 
TaxTMI 
2013 (8) TMI 1004
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....lowance of Rs. 26,88,155/- made by the Assessing Officer u/s 14A 3. The brief facts of the case are that during the year under appeal the assessee received dividend from 6.75% tax free bonds of Rs. 8,17,641/- and dividend from UTI Growth and Dividend Plans of Rs.5,05,000/-, totaling to Rs. 13,22,641/-. Before the Assessing Officer the assessee submitted that it has not incurred any expenditure towards earning of exempt dividend income. The Assessing Officer observed that the Tribunal in the case of ITO vs Daga Capital Management P. Ltd, 117 ITD 169, has held that even if the assessee claims that it has not incurred any expenditure towards earning the exempt income, the Assessing Officer has to mandatorily cal....
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....ts to Rs. 2,43,36,234/- out of which the appellant made only investment amounting to Rs. 1,89,01,299/- in only tax free bonds and UTI Gsec Fund. All the investment made were made many years ago and no investment was made in the current year. Further, the Assessing Officer has also not disapproved any of the above facts which makes it clear that the investment has made only out of interest free funds. Furthermore, I am of the opinion that the addition made by the assessing officer by invoking the provisions of Section 14A read with Rule 8D is incorrect as the Notification No.S.O.547(E) prescribing the method of determining the amount of expenditure, under sub-section of (2) of section 14A read with rule 80 has come into force only from 24th....
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....does not form part of total income shall be disallowed? 2. Learned counsel appearing for the assessee as well as learned standing counsel appearing for Revenue submits that the issue involved in this Tax Case (Appeal) is covered by a decision of this Court dated 08.08.2012 in T.C.(A) No. 2287 of 2006 in the case of M/s. EID Parry (India) Limited v. The Joint Commissioner of Income Tax, wherein this Court pointed out that in the absence of any materials regarding incurring of expenditure, the Tribunal was justified in confirming the order of the Commissioner of Income Tax (Appeals) that the deduction of 2% managerial expenses had to be made while calculating deduction under Section 80 M. Thus being pure question of fact, there being no othe....