2016 (9) TMI 1634

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....lant : Mr. Dileep Shivpuri, Sr. Standing Counsel with Mr. Sanjay Kumar, Jr. Standing Counsel, in both appeals. For the Respondent : Mr. Salil Aggarwal, Advocate, in both appeals. ORDER 1. Two questions of law are urged by the revenue in these two appeals directed against a common order. They are as follows: - (i) Whether the deletion of the amounts added under Section 14A by the ....

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....sessee's appeal was partly accepted; in that the CIT (A) arrived at the figure of Rs. 18,02,231/- and disallowed that amount under Section 14A. The ITAT, however, rejected that as well and upheld the assessee's contentions with respect to the disallowance offered by it. 4. At the outset it was pointed out that the AO's rejection of the assessee's explanation was premised upon his opinion that n....

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....whereas the entire tax exempt income is Rs. 48,90,000/-, the disallowance ultimately directed works out to nearly 110% of that sum, i.e.,Rs. 52,56,197/-. By no stretch of imagination can Section 14A or Rule 8D be interpreted so as to mean that the entire tax exempt income is to be disallowed. The window for disallowance is indicated in Section 14A, and is only to the extent of disallowing expendit....

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....ection 14A. The first question is answered accordingly. 6. So far as the issue of product development expenditure is concerned, the assessee had claimed it to be on the revenue's side to the extent of Rs. 11.87 crores. The AO was of the opinion that the product in question, i.e., samples would result in something of an enduring advantage to the assessee and that it could claim 1/3rd of the expe....