TaxTMI 
TaxTMI 
2021 (7) TMI 791
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....at: "The Ld. CIT(A) has erred in sustaining the disallowance of Rs. 17,89,428/- made by the Ld. A.O., invoking the provisions of section 14A read with Rule 8D(2)(iii) of the Act." 3. The brief facts of the case are that the assessee is a Limited company engaged in the business of power generation. For the A.Y. 2010-11, the assessee-company field its e-return of income on 28/09/2010 declaring total loss of Rs. 5,75,24,496/- under the normal provisions. Thereafter, assessee's case was taken up for scrutiny and assessment was completed U/s. 143(3) of the Act on 28/02/2013 wherein the Ld. AO invoked the provisions of section 14A r.w. Rule 8D of the Rules and made disallowance of Rs. 24,35,222/- as the assessee company had made investment in ....
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.... number o case laws which have been furnished along with submissions. 4.2. I have carefully considered the issue and the submisions made b the AR. As evident from the balance sheet, it is seen that there are no borrowed funds. Since, no interest expenditure was incurred on account of borrowings, the issue of disallowance of expenditure under rule 8D(2)(ii) does not arise and therefore the disallowance of Rs. 6,45,794/- is deleted. 4.3. Regarding disallowance under Rule 8D2(iii), the AR submitted before me that the expenditure was made only in one Mutual Fund and that too in bulk amounts (total 55 Investments and redemption put together). The few transactions do not involve much time and only one of the finance persons dealt with them an....
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....xamining the facts of the case had invoked the provisions of section 14A r.w Rule 8D of the Rules and made disallowance of Rs. 24,35,222/- which was further sustained by the Ld. AO to the extent of Rs. 17,89,428/-. On the other hand, the Ld. DR argued in support of the order of the Ld. CIT (A). 5. We have heard the rival submissions and carefully perused the materials on record. The Provisions of section 14A(2) makes it clear that the assessee shall compute the expenditure incurred by it for making investment which earns exempt income and only if the Assessing Officer is not satisfied with the correctness of the claim of the assessee he is authorised to invoke the provisions of Rule 8D of the IT Rules, 1962. In the case of the assessee suc....