TaxTMI 
TaxTMI 
2018 (10) TMI 1911
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....ard, the grounds relevant for A.Y. 2008-09 are extracted here as under : The Appellant appeals against the impugned order dated 9th March, 2016 (received on 18th April, 2016) passed by the Commissioner of Income Tax (Appeals)-6, Pune, 411044, by upholding certain disallowances on the following amongst other grounds, each of which are in the alternative and without prejudice to any others. 1. The Commissioner of Income Tax (Appeals), ought to have held that the disallowance, if any, under section 14A of the I T Act, could not exceed the amount of Rs. 3004/ -. The CIT(A) erred in upholding an adhoc disallowance of Rs. 97, 76,658/ - under section 14A @0.5% of average value of investment on the first day and last day of previo....
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....08-09. 3.1 Similarly, the AO made addition of Rs. 1,00,19,428/- for the A.Y. 2009- 10, Rs. 54,04,368/- for the A.Y. 2010-11 and Rs. 52,99,291/-. The AO invoked the provisions of section u/s.14A read with Rule 8D(2)(iii) of the Rules, 1962 for all these years too. 3.2 There is dispute on the fact that assessee received dividend income of Rs. 14,11,50,600/- for the year under consideration. The dividend income eared for other assessment years are Rs. 11,59,28,128/- for the A.Y.rs 2009- 10 and 2019-11 and Rs. 25,11,90,376/- for the A.Y. 2011-12 respectively. 4. In the First Appellate proceedings, the CIT(A) confirmed the disallowance made by the AO u/s.14A r.w. Rule 8D(2)(iii) of the I.T.Rules, 1962. Assessee submitted the disallowanc....
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....to 250/PUN/2016, dated 28-02-2018 and in the case of Serum Institute of India Ltd. Vs. DCIT in ITA Nos. 1184 and 1538/PUN/2015, dated 08-06-2018 and submitted that the relief was given in those cases on the ground of lack of sustainable satisfaction recorded by the AO before the said provisions are invoked. 7. When the Bench points out the fact that assessee himself went on record in stating incurring of expenditure of Rs. 3,004/- which are suo moto offered by the assessee during the assessment proceedings qua the existence of satisfaction about the basic requirement of making disallowance u/s.8D(2)(iii) of the I.T. Rules, 1962, Ld. Counsel for the assessee has no answer to reply on this specific issue. Therefore, on hearing both th....
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....nce belonging to the post amended period, applying formula, i.e. 0.5% of the average of the value of investments, becomes relevant. Replying to the Ld. Counsel's reliance on the judgment of Reliance Capital Asset Management Ltd. (supra), Ld. DR for the Revenue submitted that this aspect of ad-hoc disallowance linked to the number of transactions, was never put scrutiny before the Revenue authorities. Therefore, the opinion of the AO/CIT(A) is required to be obtained. Emphasizing on the need for remanding for this purpose and for applying the ratio of the said judgment, Ld. DR argued for remanding this issue for the file of AO for fresh adjudication. 10. On hearing both the sides on the merits of disallowances, quantification of expenditu....
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....sentence in para 8, says that the disallowance to be made under Rule 8D is determined at Rs. 3,50,000/-, we are not in agreement with Mr. Suresh Kumar that the Tribunal has accepted the applicability of this Rule/sub-rule/clause. This one sentence or one line cannot be read in isolation and out of context. Once the formula prescribed in Rule 8D(2)(iii) of the Rules could not have been applied is the essential conclusion, then, merely because the Tribunal did not accept the working of disallowance by the assessee in its entirety, does not mean that the appeal raises a substantial question of law. We do not think that the Tribunal's exercise can be termed as totally erroneous or illegal. It is neither perverse. The Tribunal's order ca....