TaxTMI 
TaxTMI 
2016 (5) TMI 1540
X X X X Extracts X X X X
X X X X Extracts X X X X
.... made by the Assessing Officer under Rule 8D(2)(iii) r.w.s. 14A of the Act in assessment order dated 30-11-2011 and affirmed by the CIT(A). 3. This assessee-company manufactures and trades in chemicals. It filed its return on 22-09-2009 admitting income of Rs. 4,14,19,128/-. The same was summarily processed. The Assessing Officer thereafter took up scrutiny. He noticed assessee's exempt income from dividends amounting to Rs. 8,17,506/-. There is no dispute that the impugned assessment year is 2009-10 and Rule 8D for computing disallowance of expenses relatable to such an exempt income is applicable from assessment year 2008-09. The Assessing Officer sought to apply this statutory provision for disallowing assessee's expenditure relatable t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ellant made the detailed submission which has been reproduced in the assessment order. The AO partially accepted the explanation as relating to the utilization of borrowed capital for making investments in shares for the purposes of earning of dividend income and accordingly did not make any disallowance out of interest paid on borrowed capital. But he made disallowances out of administrative expenses as per Rule 8D. This shows that the AO was satisfied that the appellant's claim that no expenditure has been incurred for earning the dividend income is not acceptable. It may be mentioned here that such satisfaction need not to be explicitly mentioned in the assessment order but it can be deduced from the order itself. Hence, this content....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Maxopp Investments vs. CIT (2012) 247 CTR (Delhi) (162) and further quotes a co-ordinate bench decision in ITA No. 1362 & 1032/Del/2013 Interglobe Enterprises Ltd vs. DCIT decided on 04-04- 2014 holding that strategic investments made in group entity are not for earning exempt income so as to invoke such a disallowance in question. The assessee also cites hon'ble jurisdictional high court decision in (2015) 376 ITR 553 (Guj) PCIT vs. India Gelatine Chemical Ltd as well as (2015) 370 ITR 338 (Delhi) CIT vs. Taikisha Engineering India Ltd to buttress its above stated argument challenging no satisfaction arrived at by the lower authorities that its books of accounts stating no expenditure to have been incurred earning of its exempt income are ....