TaxTMI 
TaxTMI 
2017 (9) TMI 379
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.... u/s. 14A of Rs. 5,72,868/- as against Rs. 1,25,963/- computed by the assessee towards expenses related to earning of income on which tax is not payable. 2. That the Ld. CIT(A) erred in not holding that the order of the AO is contrary to the order of ITAT Delhi Benches in DCIT vs. Jindal Photo Ltd. (ITA No. 4539/Del/2010), wherein the Hon'ble Members held that recording of satisfaction is a per-requisite before invoking provisions of Rule 8D of the Income Tax Rules, and therefore, cannot be sustained. 3. Assuming and without prejudice to the aforesaid grounds of appeal that the AO was justified in making such disallowance, the authorities below erred in not allowing benefit in respect of Rs. 12596/- already added in the co....
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.... of the assessee and are banked directly upon the receipts thereof. The details of the clients alongwith addresses from whom the cash was received has been filed and put on record. Thereafter, the AO observed that in the instant case, it is inferred that the assessee contended that it had not incurred any expenditure for earning the dividend income and that no disallowance was warranted. He observed that the contention of the assessee is not acceptable in view of the fact that the insertion of section 14A was curative and declaratory. The assessee has not provided any separate account for earning of exempt income. AO further observed that the assessee has made very heavy investments for earning exempt income throughout the year. Assessee al....
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....e further stated that disallowance out of expenses incurred by the assessee in the course of his practice as a Senior Advocate is not sustainable as at no stage have said the authorities found any dissatisfaction as regards the correctness of the claim made by the assessee. He requested that the addition in dispute may be deleted and the Appeal of the Assessee may be allowed. He further stated that the ITAT, 'G' Bench, New Delhi in assessee's own case for the assessment year 2008-09 has allowed the Appeal of the assessee on the similar issue vide ITA No. 949/Del/2012 (AY 2008-09) dated 14.12.2016, hence, the issue involved in the present appeal is squarely covered by the aforesaid decision. For ready reference, he filed the copy of the afor....
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....f income on which tax is not payable in the eyes of law. We further find that disallowance out of expenses incurred by the assessee in the course of his practice as a Senior Advocate is not sustainable as at no stage it has been said that the authorities found any dissatisfaction as regards the correctness of the claim made by the assessee. In view of above, no disallowance under section 14A is sustainable in the eyes of law. We further find considerable cogency in the assessee's counsel submission that the issue in dispute is squarely covered by the ITAT, 'G' Bench, New Delhi decision passed in assessee's own case for the AY 2008-09 passed in ITA No. 949/Del/2012 (AY 2008- 09) dated 14.12.2016 wherein the Tribunal has held as under:- ....
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....rejected and held to be unsatisfactory, on examination of accounts - the Rule in sub Rule (2) specifically prescribes the mode and method for computing the disallowance under Section 14A of the Act - under clause (ii) to Rule 80(2) of the Rules, the AO is required to examine whether the assessee has incurred expenditure by way of interest in the previous year and secondly whether the interest paid was directly attributable to particular income or receipt - the amount to be disallowed as expenditure relatable to exempt income, under sub Rule (2) is the aggregate of the amount under clause (i), clause (ii) and clause (iii) - Clause (i) relates to direct expenditure relating to income forming part of the total income and under clause (iii) an ....