TaxTMI 
TaxTMI 
2016 (12) TMI 1791
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....or AY 2008-09 vide his order dated 19.04.2010. 2. Brief facts of the case are that the assessee is a non banking finance company carrying on the business of loans and advances and share trading. It derives its income from other sources like mutual fund, derivatives transactions and speculation in shares besides dividend income. For the Assessment Year 2008-09, the assessee filed their return of income on 30-09-2008 declaring an income of Rs. 97,11,735/- and Book Profit under section 115 of the Act at Rs. 10,67,913/-. During this Assessment Year, the Assessee earned Rs. 48,04,057/- and Long Term Capital Gains of Rs. 3,24,19,990/-. Assessee offered Rs. 8,050/- being the amount of expense relatable to dividend and disallowed under section 1....
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.... Ltd vs DCIT (2011) 140 TTJ 73, Hindustan Paper Corporation Ltd vs. DCIT (2012) ITA No. 47/Kol/2012. He also placed reliance on a decision reported in Maxopp Investment Ltd. & Ors Vs. CIT (2012) 247 CTR 0162 (Del), and the decision of the jurisdictional High court in CIT Vs. Ashish Jhunjhunwala, G.A. No. 2990 of 2013. On the other side, Argument of the learned DR is that the learned CIT(Appeals) dealt with this matter and vide paragraph no 7 he gave cogent reasons and this appeal is devoid of any merits. 6. We have gone through the record in the light of the law on the aspect. Observations in the order of the Assessing Officer for invoking provisions under section 14A of the Act read with Rule 8D of the Rules are as follows: "Re....
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....ior to introduction of Rule 8D, jurisdictional bench of Tribunal in a number of cases taken 1% of exempted income to be reasonable estimate for expenditure relatable to exempt income. Even by that yard stick the claim of having incurred expenditure of Rs. 8,050/- in relation to dividend income of Rs. 48,04,057/- and "Long Term Capital Gain" Rs. 3,24,18,990/- appears to be quite meagre. I am, therefore, satisfied that the claim of expenditure incurred and shown by the appellant with regard to the accounts is not correct". 8. Basing on this observation of the learned CIT(Appeals), learned DR argues that here is sufficient compliance of recording of satisfaction for invoking provisions under section 14A of the Act read with Rule 8D of the R....
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....xpenditure made by the assessee is not correct. He is required by law to record his non-satisfaction having regard to the accounts of the assessee of the previous year, failing which his assumption of jurisdiction under section 14A of the Act read with Rule 8D of the Rules becomes non est in the eye of law. 10. Our above understanding is fortified by a decision reported in Maxopp Investment Ltd. & ors. Vs. Commissioner of income tax (2012) 247 CTR 0162 (Del) for the principle that even prior to the introduction of sub-ss. (2) and (3), Section 14A would require the AO to first reject the claim of the assessee with regard to the extent of such expenditure, such rejection must be for disclosed cogent reasons and it is only then that the que....