TaxTMI 
TaxTMI 
2017 (5) TMI 1665
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....10-11 Grounds of Appeal 1. The learned CIT(A) has erred in upholding the disallowance of administrative expenses of Rs. 6,94,860 out of Rs. 7,84,185/- made by AO on investment in shares claiming the entire administrative expenses was incurred by the assessee for the purpose of investment in shares. 2. The appellant craves to leave to add, to alter or amend the above grounds of appeal if so advised. ITA No. 6931/Mum/2014 for A.Y 2011-12 Grounds of Appeal 1. The learned CIT(A) has erred in upholding the disallowance of Rs. 7,33,861 out of Rs. 8,22,241 made by AO u/s 14A of the I.T. Act r.w.r 8D (2) (iii) as against Rs. 1,30,307 disallowed by the appeallant on account of the administrative expenses for the p....
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....t submitted that the company had disallowed Rs. 25,000/- on account of administrative expenses in its computation of income. It was further submitted that direct expenses of Rs. 89,325/- on account of demat charges could not be considered at the time of filing of return and hence the total disallowance worked out to Rs. 1,14,325/-. Without prejudice, it was further submitted that maximum disallowance under Rule 8D(2)(iii) may be restricted to the administrative expenses debited to Profit & Loss a/c amounting to Rs. 8,09,185/. The AO did not accept the contention the assessee and after allowing set off suo moto disallowance of Rs. 25,000/-, made by the appellant made an additional disallowance of Rs. 7,84,185/- 6. The Assessment Order was....
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....in the P&L account on administrative and other expenses. In any case, disallowance cannot be made more than the total expenses debited to the P&L Account. From the details of the expenses, it is clear that 4 ITA No. 4090/MUM/2013 Assessment Year: 2010-11 most of the expenses are specific in nature and exclusively incurred for the business activity of the assessee. Therefore, the expenses on account of auditor fee, legal and professional fees, profession tax, business support fees cannot be said to have any direct or proximate nexus with the activity of investment or earning the exempt income. Thus the disallowance u/s 14A can be made only to the extent of allocation of these expenses which has direct or proximate nexus with earning of....
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....M/2013 Assessment Year: 2010-11. 11. The aforesaid decision of Mumbai Tribunal was further followed by "C" Bench of the Mumbai Tribunal in Capstan Trading Pvt. Ltd. vs. ACIT, Mumbai ITA 4088/M/12, Palm Shelter Estate Development Pvt. Ltd. vs. ACIT, Mumbai ITA 4089/M/12 & Casa Maria Properties Pvt. Ltd. vs. ACIT, Mumbai ITA 4091/M/13 and all the three appeals filled by assessee were allowed. 12. In the case before us, the only grievance of the assessee is that the CIT(A) has wrongly upheld the disallowance of administrative expenses made by the AO on investment in shares holding that the entire administrative expenses was incurred by the assessee for the purpose of investment in shares. The ground in present case is identical to the gr....