TaxTMI 
TaxTMI 
2020 (10) TMI 929
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.... 1.1 That the learned Commissioner of Income Tax (Appeals) has erred in sustaining the disallowance failing to appreciate that while making the aforesaid disallowance learned Assistant Commissioner of Income Tax has not established the nexus between the specific expenditure and the income which does not form part of the total income despite the fact that the appellant has specifically submitted that no expenditure has been earned for earning the exempt income. 2. That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining a disallowance of Rs. 2,22,649 /- on account of interest expenses claimed on car loan. 2.1 That in doing so, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the fact that requisite documents/evidences were filed and explanation were tendered before the learned ACIT explaining the aforesaid expenditure, but the learned ACIT based his decision purely on suspicion, surmises and conjectures and as such, the disallowance so made should be deleted. 3. That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining a disallowance of Rs. 1,92,186....
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....arlier years. We have also gone through the order of the Co-ordinate Bench of ITAT Delhi and find the ratio squarely applicable to the year in question. The relevant part of the said order is as under: "13. On ground no. 3 assessee challenged the disallowance of Rs. 6,08,180/- u/s 14A of the Act read with Rule 8D(2 )(iii) of the Act. The AO noted that assessee has earned income exempt from tax amounting to Rs. 21,26,012 /- from dividends. The assessee was asked to give details and justify the claim in view of section 14A read with Rule 8D with reference to the dividend income. The assessee submitted that he has not claimed any expenses against earning of the said income. Therefore, above provisions are not applicable in the case of the assessee. The assessee relied upon the following decisions: 1. " CIT vs. Wimco Seedlings - ITA No. 1367/2008, 1368/2008 & ITA No. 1391/2008 ; 2. ACIT vs. Sun Investments Pvt. Ltd. (2011 ) 48 SOT 159 ( Delhi); 3. Relaxo Footwear Ltd. vs. Addl. CIT, Range-15, New Delhi (2012 ) 50 SOT 102 ( Delhi)." 14. The AO, however, noted that the basic object of section 14A is to disallow the direct and indirect expendit....
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....g this statement and reading all the possible expenses that involve in investment process, Ld. Assessing Officer is not specific as to what exactly the probable expenditure in this matter the assessee could have incurred. According to the assessee the investment was made in mutual funds and the expenses were already directed by the operators and a certificate to that extent was submitted before the Ld. Assessing Officer. Further, the instructions are that the dividend income will be directly credited to the bank account of the assessee so that no probable expenditure at the end of the assessee for deposit of the dividend in bank could have occurred. Having regard to this set of facts and circumstances involved in this matter, we are of the considered opinion that instead of making a sweeping enumeration of the probable expenses involved in investment process, Ld. Assessing Officer could have taken legal exercise to verify the correctness or otherwise of the certificate that was issued by the asset management companies or the Citibank in this respect. We, therefore, find that there is no proper record of satisfaction as to the expenses incurred by the assessee for earning the exempt....
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....of the amount involved, the issue stands similar the fact which counsels from both the sides not controverted. 11. We have gone through the facts of the case and find it similar to the earlier years. We have also gone through the order of the Co-ordinate Bench of ITAT Delhi and find the ratio squarely applicable to the year in question. The relevant part of the said order is as under: "After considering the rival submission, we are of the view that addition is wholly unjustified. 9. Ld. Counsel for assessee pointed out that the AO noted in the assessment order that issue is similar as has been considered in AY 2009-10. He has submitted that assessee preferred appeal before ITAT 'D' Bench in AY 2009-10 and appeal of assessee has been allowed on the similar ground, vide order dated 15.11.2018 in which the Tribunal in para 6 held as under: " 6. Ld. AR submitted that this car loan was the only interest- bearing loan that was taken by the assessee during the year and all the other funds are either interest free loans or the balance of capital account available with him. We find force in the submission of Ld. AR that the car loan of Rs. 50 lacs is no match a....