TaxTMI 
TaxTMI 
2018 (1) TMI 1029
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....9.01.2013 for the Assessment Year 2010-11. 2. The first issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in upholding the disallowance made u/s 14A of the Act read with Rule 8D(2) of the Rules. 3. The brief facts of this issue is that the assessee is engaged in the business of purchasing and selling of Molasses, leather goods, handling of liquid cargo and bulk liquid storage, banking, lending etc. The return of income for the assessment year 2010- 11 was filed by the assessee company on 30.09.2010 declaring total income of Rs. 38,96,90,480/- . In the course of assessment proceedings two notices were sent to the assessee calling for various details as is evident from the paper book furnished by the assessee ....
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....ning exempt income under section 14A of the Act read with Rule 8D of the Income Tax Rules. 5. We have heard the rival submissions. We find that the ld. AR had argued that there was no query raised by the Ld. AO with regard to issue of disallowance u/s 14A of the Act in the entire assessment proceedings. This we find to be correct from the perusal of questionnaire issued by the Ld. AO which are enclosed in pages 62 and 63 of the paper book. We also find that the Ld. AO had merely made the disallowance u/s 14A by placing reliance on the tax audit report without even going into the very basis of the workings of the said amount arrived at by the tax auditor. During the year under appeal, it is not in dispute that the provisions of Rule 8D are....
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....he Ld. AO cannot proceed to make disallowance u/s14A of the Act read with Rule 8D of the Rules. In these facts and circumstances, we hold that no disallowance u/s 14A of the Act could be made in the instant case. Accordingly, ground no. 1 raised by the assessee is allowed. 6. The next issue to be decided in this appeal is as to whether the Ld. CIT(A) was justified in upholding the disallowance made towards leave encashment in the sum of Rs. 86,12,113/-, in the facts and circumstances of the case. 7. The brief facts of this issue is that the assessee has made provision for leave encashment in the sum of Rs. 86,12,113/- and claimed the same as allowable expenditure in the return of income. The Ld. AO disallowed the same u/s 43B(f) of the Ac....