TaxTMI 
TaxTMI 
2018 (3) TMI 82
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.... erred in law in not directing the Assessing officer, not to apply section 14A read with rule 8D of the Income Tax rules, as the company had full accounting in respect of its various divisions and projects, though presented, but was ignored. 2. On the facts and circumstances of the case, the Commissioner of Income Tax (Appeals) has erred in law in not interfering with the order of the Assessing officer on the application of section 14A as all the investments were made by the assessee in its subsidiary companies, for execution of operations, and such investments are not reckoned for disallowance under section 14A read with rule 8D. (refer case law: EIH Associated Hotels vs. DCIT) ITAT Chennai, I.T.A. No. 1503/Madras/20012: dated: 17....
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....g Services Ltd." 3. The assessee company is engaged in the business of Investment Company for holding shares and consultancy services in micro finance and rural livelihood promotion services. The return of income declaring an income of Rs. 1,10,96,790/- under normal provisions of the Income Tax Act, 1961 and book profit of Rs. 65,62,400/- under MAT provisions of the Income Tax Act, 1961 was filed on 28/09/2011. The case was selected for scrutiny. Notice u/s 143(2) of the Act was issued on 24/09/2012 and served on the assessee. Subsequently, notice u/s 142(1) of the Act along with questionnaire was issued on 17/07/2013. In compliance thereto, the representatives of the assessee attended the assessment proceedings from time to time and fil....
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.... the amount of Rs. 1,97,03,392/- was disallowed by the Assessing Officer. 4. Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. AR submitted that the additional ground filed by the assessee be taken into account as the same are in respect of legal ground. The Ld. AR also relied upon the Hon'ble High Court decision in case of CIT Vs. Sam Global Securities Ltd. 2013 38 Taxman.com 129. The Ld. AR further submitted that the disallowance cannot be more than exempt income. The computation of the income was before the Assessing Officer as well as CIT(A) and the same should have been taken into consideration by the authorities. The Ld. AR re....
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....l as during the course of appellate proceedings before me, the appellant has not been able to establish that no expenditure was incurred by it on making these investments, more so in the light of the huge financial expenses of Rs. 4.74 crores incurred by it during the year. In view of the forgoing discussion, I uphold the action of the Assessing Officer in making the disallowance under rule 8D. Ground no. 1 of the appeal is dismissed." It is a settled law that the disallowance cannot be more than exempt income. The Hon'ble High Court decision in case of CIT Vs. Sam Global Securities Ltd. (2013) 38 Taxman.com 129 held that the disallowance cannot be more than exempt income. The computation of the income was before the Assessing Officer as....