TaxTMI 
TaxTMI 
2017 (1) TMI 861
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....leted the assessment u/s. 143 (3) of the Act, on 11/03/2012, determining its income at Rs. 88.66 lakhs. ITA/46/Mum/2014: 2. First ground of appeal,raised by the assessee, is about confirming the disallowance of Rs. 82.08 lakhs u/s. 14 A read with Rule 8D of the Income Tax Rules, 1962 (Rules).During the assessment proceedings, the AO found that the assessee had earned an amount of Rs. 3.13 crores as mutual fund dividend and Rs. 77.74 lakhs as interest income from other sources,that it had claimed the income from mutual fund as exempt,that it had not disallowed any expenditure attributable to the exempt income in computation of income u/s. 14 A of the Act. Accordingly,he directed the assessee to show cause as to why disallowance u/s.14A....
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....Departmental Representative and the Authorised Representative stated that disallowances to be made u/s. 14 A r.w.r. 8D of the Rules stands decided by the order of the Tribunal for the AY.2009-10. We would like to reproduce the relevant portion of order and it reads as under: 8. We have considered the issue and examined the facts available on record. Even though the assessee has specifically explained the facts, neither the AO nor the CIT(A) considered the same, but invoked Rule 8D and disallowed the amount. As far as interest is concerned, there is direct nexus between the loan obtained from Ms. Sabita R Narang and advancing the same to M/s Nautilus Trading & Leasing Pvt. Ltd. on which interest income was earned. Therefore, even though A....
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....sment order, there is no discussion about Assessing Officer having arrived at the satisfaction. The detailed explanation by the Assessee on various facts were not considered by the AO. Having examined the facts as stated above, we are of the opinion that Rule 8D cannot be invoked as such in the given facts of the case. However, we can also not say that Assessee had not spent any amount for earning the dividend income. A part of the general expenses claimed also gets attributable to the earning of exempt income. Therefore, we are of the opinion that one percent of the dividend income from the Mutual Funds would be reasonable enough for disallowance u/s. 14A out of the expenses claimed by the Assessee ( other than those direct expenses mentio....
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....pprove the order or the CIT(A) in the given set of facts. The only option left to us is to reasonably determine the amount for disallowance u/s 14A on the facts of this case. " Respectfully,following the above we hold that of FAA was justified in deleting the interest expenditure.Effective ground of appeal,filed by the AO,is dismissed. ITA/705/Mum/2014: 5. First ground of appeal,raised by the assessee, is about disallowance made by the AO under rule 8D(iii) of the Rules.While dealing with the same issue,we have narrated the facts in the earlier part of our order.We have mentioned that the FAA had partly upheld the disallowance made by the AO. 6. We find that,while adjudicating the appeal for the AY.2009-10,the Tribunal had restr....
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....pairing.In our opinion,it is the duty of the assessees to produce evidence in their support if they claim that any expenditure was incurred for carrying out business. In the case under consideration,the assessee has failed to prove the genuineness of the expenditure incurred by it during the year under consideration. Therefore,we are of the opinion that order of the FAA does not suffer from any legal infirmity.Confirming the same,we decide ground number two against the assessee. As a result,appeal filed by the AO stands dismissed and assessee's appeal is partly allowed. Order pronounced in the open court on 06th January, 2017 ============= Document 1 Account Head Employee Cost Amounts (Rs.) 1,85,446 Remarks Auditor....