AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 255
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....ace Exports and M/s Jai Shri Exim. The return of income was filed on 30.09.2013 at total income of Rs. 34,13,530/-. During the assessment proceedings the AO noted that the assessee has made investment of Rs. 9,00,72,977/- and earned exempt income to the tune of Rs. 15,37,926/- in the form of Dividend, PPF Interest, Capital Gains u/s 10(38) and profit from partnership firms. The AO made addition of Rs. 4,58,956/- by invoking Section14A of the Act. By the impugned order, the ld. CIT(A) has confirmed the action of the A.O. against which the assessee is in further appeal before the ITAT. 3. I have heard the rival contentions and carefully gone through the orders of the authorities below and found from the record that in the assessment order th....
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.... position and not having been rebutted by the AO in any manner, the provisions of S.14A could not have been invoked. The disallowance was made by the AO by invoking provisions of S.14 A r/w Rule 8D of the Rules by alleging that the part of expenditure claimed by the assessee has been incurred for earning of tax-free income though the assessee had not incurred any expenses to earn tax free income. The AO before making said addition has simply referred to the relevant provisions and judgment of Hon'ble Supreme Court in the case of CIT vs United General Trust Ltd. 200 ITR 488 (SC) which cannot be applied to the instant case as the facts of the present case are totally different from the above case. 5. The Hon'ble Supreme Court in the case....
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....ier Assessment Years were not acceptable to the Assessing Officer, particularly, in the absence of any new fact or change of circumstances. Neither any basis has been disclosed establishing a reasonable nexus between the expenditure disallowed and the dividend income received. That any part of the borrowings of the assessee had been diverted to earn tax free income despite the availability of surplus or interest free funds available (Rs. 270.51 crores as on 1.4.2001 and Rs. 280.64 crores as on 31.3.2002) remains unproved by any material whatsoever. While it is true that the principle of res judicata would not apply assessment proceedings under the Act, the need for consistency and certainty and existence of strong and compelling reasons f....
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....nder the provisions of section 14A. The provisions of section 14A(1) states that no deduction shall be made in respect of the expenditure incurred by the assessee in relation to income which does not form part of the total income. Sub-section (2) of section 14A empowers the AO to determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be ITA No. 474/JP/2015 M/s. Ruby Merry Enterprises Pvt. Ltd. vs. JCIT (OSD) Central Circle- 3, Jaipur 5 prescribed, if the AO, having regard to the accounts of the assessee is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to the income wh....
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.... 122/JP/2015 vide order dated 05 /05/2016, Vide para 2.7 internal page 9 also, similar view has taken. In that case it was held as under: "2.3 The relevant findings of the Coordinate Bench in decision referred supra is as under: The above finding on fact by the Revenue is not controverted by placing any material on record. Moreover, there is no dispute with regard to fact that the assessee has earned exempt income of Rs. 27,006/- against which disallowance of expenditure amounting to Rs. 42,22,857/- was made. The AO has not recorded his satisfaction as to how the expenditure disallowed by the assessee of Rs. 62,9878/- towards administrative expenses is not reasonable. Further we find that the assessee has demonstrated by placing suffici....