2017 (3) TMI 530

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....the assessee is directed against the order passed by CIT(A)-2, Hyderabad and it pertains to the A.Y. 2009-2010. The following grounds were urged before the Tribunal. 1. "The CIT(A) erred in confirming the addition of Rs. 14,90,799 u/s14A of the Income Act,1961 read with Rule 8D (2) i.e., 0.5 % of the average investment. The assessee made investment in Group Companies and most of the same are br....

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....ular. For the year under consideration, it declared total income of Rs. 1.04 crores. During the course of assessment proceedings, the A.O. noticed that the assessee made some investments in quoted and unquoted shares and earned dividend income. According to him, provisions of section 14A would be applicable and some expenditure has to be disallowed under Rule 8D of I.T. Rules read with section 14A....

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....come and therefore, disallowance of Rs. 14,90,799 as per Rule 8D(2)(iii) is in accordance with law. 4. Aggrieved, assessee is in appeal before the Tribunal. Learned Counsel for the Assessee submitted that the investments in group companies was made in earlier years and most of such investments were brought forward from earlier years and no activity was involved in this year and hence no expendi....

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....n funds. No material was placed by Revenue to contradict the findings of CIT(A). Therefore, we hold that disallowance on that count is not warranted. This leaves us with the subsidiary issue i.e., administrative expenditure. In the case of M/s. Daga Global Chemicals Pvt. Ltd., (supra), the ITAT, Mumbai Bench observed that disallowance under section 14A read with Rule 8D cannot exceed the exempt in....