TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 1489
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....addition of Rs. 1,47,153/- being expenses incurred in connection with reduction of authorized share capital by treating the same as capital expenses. (ii). Both the lower authorities have passed the order without properly appreciating the fact and that they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Priniciples of Natural Justice and therefore deserve to be quashed. (iii). The ld.CIT(A) has erred in law and on facts of the case in confirming action of the ld.AO is levying interest u/s 234A/B/C of the Act. (iv). The....
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.... to such income which does not form part, of the total income under this Act in accordance with such method as may be prescribed, if the assessing officer, having regard to the accounts of the assessee, is not satisfied with are 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 this Act. The Parliament in its wisdom had enacted section 14A with retrospective effect from1I-4-1962 in order to clarify tin: already existing position that only those expenses could be claimed which were relatable to the taxable income. In the past, it was seen that assessee's were pushing the expenses relating to exempt income which were not taxable towards taxable in....
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....divided incomes declared by the investee companies and also to keep track of the dividend income having been regularly received by the assesses. This activity itself called for considerable management attention and cannot be left to a junior clerk. In view of the above narrated facts and points of law disallowance u/ s. 14A r.w.r. 8D is made. Direct expenses Rs. Nil Interest expenses Rs. Nil Administrative expenses Rs. 23564/- i.e. 1/2 % of average value of investments in shares/MF: (Opening balance 426956 + closing balance 8998750)/2= Rs.4712853/- However the assessee has already disallowed Rs. 10,000/ - hence, an amount of Rs. l3564/-is disallowed u/s. 14A r.w. Rule 8D. Reliance in this regard is placed upon the fo....
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....is 10,000 and added the same to its income. f. In this respect, we may point out that the provisions of section 14(2) require the AO to examine the facts of the case and determine the amount of expenditure to be disallowed. In the eventuality of it being not possible to do so, to apply the provisions of Rule 8D for computation of the same. g. We may point out that application of Rule 8D is not automatic. The AO has to look into the facts of the case. It is only when it is not possible to find out the amount of expenditure incurred for earning exempt income, the provisions of Rule 8D are required to he applied. h. In the instant case, the AO has not looked into the merits of the amount to be disallowed and applied the provision of Rule....
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....274 were also initiated. Against the said order appellant preferred first statutory appeal before the ld.CIT(A), but ld.CIT(A) partly allowed the appeal of the appellant. 6. We have gone through the relevant record and impugned order confirming disallowance of Rs. 1,47,153/- being expenditure incurred reduction of share have been given in Page Nos.5 & 6 and Para No. 5 & 6 of the CIT(A) and assessee company applied to the Gujarat High Court for reduction authorized share capital and incurred an expenditure of Rs. 1,47,153/- for reduction of authorized share of the company. 7. Ld. AO relied on decision holding that expenditure on increase in share capital is a capital expenditure and applying the same conversely and AO disallowed the expens....