2017 (11) TMI 1545
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....arned CIT (A) failed to appreciate that neither Ld. AO has recorded any satisfaction about the expenses related to exempted income nor he found any specific actual incurrence of such alleged expenses and hence erred in sustaining the addition of Rs. 8,88,490/- made u/s 14A read with Rule 8D. 3. That, in addition to above learned CIT (A) failed to appreciate that material on record and related law on the issue, hence order is arbitrary. 4. That learned CIT (A) erred in sustaining the ad-hoc disallowance of Rs. 2,00,000/- out of business promotion expenses without appreciating that AO had accepted the book of accounts and had not found a single instance of exp. not related to business or unsupported or bogus/defective and in whole disre....
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....lanation of assessee that he has not incurred any expenditure is rejected as being general/vague as assessee has made huge investment in UTI liquid funds and disallowance u/s 14A/rule 8D is made. 6. In the first appeal, assessee demonstrated that he has not incurred any expenditure as dividend is only credited to UTI Liquid fund and small dividend is e-transfer with advise to assessee and claimed that AO has also not found any expenditure relating to dividend after examining the accounts in detail. He also contended that ld. AO has not recorded any satisfaction about incorrect claim of assessee or about incurrence of expenditure against dividend income etc. 7. The ld. CIT(A) found, assertion of ld. AO that reply of assessee is considered ....
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....hen dividend is directly credited to fund by way of credit entries and then such credit by fund does not require any effort by assessee which is the major portion of dividend. Other Amount is directly collected by bank through e-transfer example of which is placed on record at pages 3-4. Besides, the authorities below have not indicated any specific amount/item which is considered as related to above income. Ld. CIT(A) misdirected himself in stating about the decisions for investment that too on a probabilistic view but not for exempt income more so when funds etc. itself provided sufficient services as explained by assessee before AO. Investments are admittedly out of own funds for which no addition is made. Ld. AR also took us to the orde....
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....Ltd. v CIT (2017) 86 Taxmann.com 49(DEL) 11. In the case of HT MEDIA, AO had invoked 14A almost on the same basis i.e. after stating that explanation on no expenditure is no acceptable and that making, continuing, exiting from investment etc. are coordinated management decision and so expenditure is embedded in indirect expenses( from para 36) and so s.14A invoked. Hon'ble court after relying on Godrej & Boyce Mfg. Co. Ltd. 394 ITR 449(SC) held that AO failed to record proper satisfaction. In the case of Taikisha Engineering, hon'ble court has relied on hon'ble Bombay HC decision in above case of Godrej reported in 328 ITR 81 for the proposition that that satisfaction has to be recorded with respect to accounts in terms of ss. (2)/(3) of ....
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....nds 4 & 5 is against the ad-hoc disallowance of Rs. 2 lakhs out of business promotion expenses. 16. During the relevant AY, the assessee has debited business promotion expense of Rs. 10,02,455/- to the Profit and Loss A/c. On enquiry on the nature of the expense, it was explained to be for various itemse specially silver/gold coins given under incentive scheme. Though the ld. AO found claim correct in principle to boost sale but held that it cannot be said they are fully for business purposes and disallowed ad-hoc amount of Rs. 2 lakhs. The ld. CIT(A) upheld the addition by observing that that only few instances of distribution of coins given so it is not clear how many were actually distributed in scheme. 17. Ld. AR placed on record ledg....