2016 (11) TMI 1405

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....of assessee against the order of CIT(A) confirming the action of the Assessing Officer in disallowing the expenses relatable to exempted income by invoking the provisions of Section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 (hereinafter 'the Rules'). 3. Briefly stated facts are that the Assessing Officer during the course of assessment proceeding noticed that the assessee has earned dividend income of Rs. 15,26,721/- and claim the same as exempted u/s 10(34) of the Act, but the expenses to the extent of Rs. 75,84,842/- was attributed towards exempt income. The assessee took us through the computation of disallowance made by Assessing Officer u/s 14A of the Act read with Rule 8D Rule as under: - 2 (i) The amount....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ified the expenses that are indirect/ y incurred in relation to such investments by way of cost on the personnel of RBCL who are engaged in the day-to-day activity of Fund management and investments. Following table shows the entire emoluments of Fund management team on cost-to-company basis and also the portion thereof reasonably attributable, based on time spent by the team, to the activity of investment which gives/may rise to tax free income. Sr. No Name Employee Designation Emolument (cost to company) (amount in Rs.) % Attributable to investments activity Attributed amount in Rs. 1. Mr. Ketan VP - Finance 1,498,598 15% 187,725 2. Mr. S K Shenoy Sr. Manager Finance 422,341 15% 53,873....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t of expenses that may reasonably be considered as incurred in relation to exempt income and which are disallowable under Section 14A of the Act amount to Rs. 11,78,104/- and it comprises of: 1. Demat and depository charges 58,361 2. Emoluments of employees in FMT (See Para 7.3) 317,835 3. Other expenses of Ho Prorated (See Para 7.4) 801,908   Total amount disallowable under section 14A of the Act 11,78,104   Accordingly, the assessee work out the disallowance u/s 14A of the Act read with Rule 8D of the Rules at Rs. 11,78,104/- as against the earlier computation at Rs. 75,84,842/-. The learned Counsel for the assessee stated the fact that the assessee has not attributed any disallowance in....