TaxTMI 
TaxTMI 
2017 (9) TMI 731
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....tice and any other variation to returned income without approval of concerned senior authority is unsustainable and therefore further erred in not deleting the said addition to returned income. 2. That on the facts and in the circumstance of the case the learned CIT (Appeals) erred in confirming the disallowance u/s 14A of Rs. 80,182 as against NIL computed by the assessee towards expenses claimed as related to earning of income on which tax is not payable. 3. That the order of learned CIT (Appeals) is contrary to the law laid down by Delhi High Court in case of Maxopp Investment v. CIT (reported in 203 Taxman 364(Delhi), and not sustainable and violates the letter and spirit of the Order of the ITAT in the case of the assessee for A.....
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.....2014 passed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred the Act). The difference between assessed income and returned income of Rs. 80,182/- arose on account of addition made by way of disallowance u/s. 14A read with Rule 8D out of expenses claimed. 3. Aggrieved with the assessment order dated 12.3.2014, the assessee preferred an appeal before the Ld. CIT(A), who vide impugned order dated 01.9.2015 has partly allowed the appeal. 4. Against the impugned order dated 01.9.2015, assessee has filed the Appeal before the Tribunal. 5. In this case, Notice of hearing to the assessee was sent by the Registered AD post, in spite of the same, assessee, nor his authorized representative appeared to prosecute the matter in dispute,....
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....d to the applicability of Rule 8D of the IT Rules and also the provision of section 14A of the IT Act is now well crystallized by the later decisions of the Supreme Court In the case of Walfort Share & Stock Brokers, which has been followed and applied by the Bombay High Court in the case of Godrej Boyce and the Jurisdictional High Court in the case of Maxopp Investment. Reference may be made to certain observations of the Bombay High Court and the Delhi High Court in the said judgments which are as under: (i) The Bombay High Court in the case of Godrej Boyce has held as under: "..... In order to determine the quantum of the disallowance. there must be a proximate relationship between the expenditure and the income which does not form p....
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....red" in the context of the ITA 687/09 & Ors Page 25 of 38 expenditure being in connection with or pertaining to income which does not form part of the total income under the said Act. 28. It was contended that unless and until there was actual expenditure for earning the exempted income, there could not be any disallowance under section 14A. While we agree that the expression "expenditure incurred" refers to actual expenditure and not to some imagined expenditure we would like to make it clear that the 'actual' expenditure that is in contemplation under section 14A(1) of the said Act is the 'actual' expenditure in relation to or in connection with or pertaining to exempt income. The corollary to this is that if no expenditur....