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2019 (10) TMI 444
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....hallenged the disallowance of Rs. 6,86,000/- under section 14A read with Rule 18D against the exempted income of Rs. 22,75,000/-. The A.O. noted that the assessee has credited receipts of dividend income of Rs. 27,75000/- to the Profit & Loss Account under the Head "Other Income" and claimed the same exempt under section 10(35) of the I.T. Act. The assessee was asked to file certain details including details of expenses incurred related to dividend income, since no deduction is allowable in respect of expenditure incurred in relation to income which does not form part of total income under the provisions of section 14A of the Act. The assessee filed no detail or explanation. As per schedules of Balance Sheet assessee's investments in sha....
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.... Investment Ltd., vs. CIT 347 ITR 272 wherein it has been held that Rule 8D is not applicable automatically and before applying the same, A.O. has to first record his satisfaction and reject the claim of assessee with regard to extent of expenditure by having regard to the accounts of assessee and such rejection must be for disclosed cogent reasons. It is only then that the question of determination of expenditure under section 14A read with Rule 8D by the A.O. would arise. In the present case, the A.O. made disallowance without recording satisfaction. It was further submitted that Bank is having non-interest bearing funds as per audited balance-sheet for assessment year under appeal i.e., capital of Rs. 1921.76, reserve and surplus Rs. 575....
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....Share & Stock Broking Services Ltd., [2018] 96 taxmann.com 168 (Kolkata - Trib.) in which it was held as under : "Prior to 2-6-2016 benefit of netting of interest under rule 8D(2)(ii) could be allowed without even emphasising on need of having any inextricable link between interest earned and interest paid." 6. On the other hand, Ld. D.R. relied upon the Orders of the authorities below and submitted that some expenses are required to be incurred for earning exempted income, therefore, addition is wholly justified. 7. We have considered the rival submissions. The submissions made by assessee before the Ld. CIT(A) as noted above are not in dispute that assessee has sufficient capital and reserve. The assessee has non-interest b....
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....ount of deduction claimed under section 36(1)(viia) of the I.T. Act, 1961. The A.O. noted that assessee had debited the aforesaid amount on account of provision for standard asset under the Head "Provision for Bad & Doubtful Debt" to the P & L A/c. In view of the fact that standard assets earns interest regularly and by no stretch of imagination these assets can be called bad or doubtful. Assessee was asked to explain as to why the aforesaid amount on account of provision for standard asset should not be disallowed. The assessee did not offer any explanation. The A.O, therefore, following his Order for the A.Y. 2011-2012 disallowed the above amount. The Ld. CIT(A) confirmed the addition. 10. Learned Counsel for the Assessee at the outset....
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.... previous year shall be aggregated separately ; (b) the sum so arrived at in the case of each such branch shall be divided by the number of months for which the outstanding advances have been taken into account for the purposes of clause (a) ; (c) the aggregate of the sums so arrived at in respect of each of the rural branches shall be the aggregate average advances made by the rural branches of the scheduled bank. Explanation : In this rule, "rural branch" and "scheduled bank" shall have the meanings assigned to them in the Explanation to clause (viia) of sub-section (1) of section 36.]" 4. In view of the Rules, the assessee computed the amount of provision as under: (Amount in thousands) S.N....
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....84 (Asr)/2015, observing as under: "7. In view of this settled legal position, we are of the considered opinion that deduction of the provision under section 36(1)(viia) is neither limited to the quantum of bad debts in the books nor is computed with reference to the quantum of standard assets and the deduction in this clause refers to allowable provisions of anticipated default on the loans and advances made in respect of total assets including standard assets and the claim of the assessee does not fall into the proviso to section 36(1)(viia) as the proviso deals with further deduction for provisions on bad and doubtful debts. Hence, we find that the orders of the authorities below cannot be sustained and the addition of Rs. 84,70....