TaxTMI 
TaxTMI 
2016 (11) TMI 1297
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....in nature needing no specific adjudication. 3. In Ground Nos.2 to 5, the grievance raised by the assessee is against sustaining disallowance of Rs. 2,20,841/- u/s 14A of the Act r.w. rule 8D. 4. Ld. AR submitted that the assessee had not earned any exempt income during the previous relevant to the impugned assessment year. Hence, according to him, invocation of sec. 14A was not called for. 5. Per contra, the ld. DR while admitting that assessee had not earned any exempt income, asserted that disallowance u/s 14A could not be linked to earning of exempt income as such. 6. We heard the rival contentions and perused the orders of the authorities below. The Assessing Officer had made a disallowance of Rs. 2,20,841/- by invoking sec.....
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....os are that the assessee engaged in the business of software development, had filed its return declaring income of Rs. 4,81,080/-. During the course of assessment proceedings, it was noted by the Assessing Officer that assessee had claimed business promotion expenditure of Rs. 14,95,000/-. The details of the expenditure provided by the assessee read as under: 1. Chennai St. Bede's Sports foundation Rs. 45,000 2. Youth Association for classical music Rs. 50,000 3. The Tamilnadu Cricket Association Rs. 4,00,000 4. Sponsorship for special box at MA Chidambaram Stadium, Chennai Rs. 1000000 (1/6th of Rs. 60 lakhs) 9. Explanation of the assessee was sought as to why the above expenditure should ....
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....f the box placed in the stadium. In addition, assessee had paid Rs. 4,00,000/- for sponsoring 14 cricket tournaments conducted by Tamilnadu Cricket Association. Conclusion of the Assessing Officer was that the assessee was having a very limited clientele viz. M/s Infosys, M/s Standard Chartered Bank, The Cancer Institute and M/s Sundaram BNP Paribas. The only other client the assessee was having, as per the Assessing Officer, was based on US. The sponsorship of the special box did not result in any benefit to the assessee and as per the Assessing Officer, was not an expenditure relatable to the business of software development. The Assessing Officer also noted that the Managing Director of the assessee Shri K.V. Aiyappan was also the Vice P....
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.... as per the ld. AR, the expenditure was incurred in relation to the business of the assessee and the Assessing Officer ought not have sat in the chair of the businessman to decide whether the expenditure was required or not. 12. Per contra, the ld. DR strongly supported the orders of the authorities below. 13. We have considered the rival contentions and perused the orders of the authorities below. Out of the total expenditure of Rs. 14,95,000/- claimed by the assessee under the head business promotion, Rs. 14 lakhs was paid to Tamilnadu Cricket Association. Out of the balance sum of Rs. 95,000/-, a sum of Rs. 45,000/- was paid to Chennai St. Bede's sports foundation and Rs. 50,000/- was paid to Youth Association for classical music. ....