2023 (8) TMI 1250

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....the disallowance u/s 14A. 2. Briefly stated, facts of the case are that the assessee filed return of income declaring current year loss at Rs. (-)22,78,49,240/- on 30.11.2014. The return of income filed by the assessee was selected for scrutiny assessment and statutory notices under the Income-tax Act, 1961 (in short 'the Act') were issued and complied with. During the course of assessment proceedings, the Assessing Officer noted that the assessee earned dividend income of Rs. 2,19,68,85,793/- from investment in equity shares and mutual funds and claimed the entire dividend income as exempt. However, the assessee did not make any suo moto disallowance out of expenses in profit and loss account related to exempted income. It was claimed by ....

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....warrant a disallowance, i.e., even in the absence of the rule. Similarly, the part of the rule prescribing the ratio in respect of indirect expenditure (rule 8D(2) (ini)) cannot be altered on account of (say) hardship. This is as the rule prescribes the same as the ratio of indirect expenditure required to support an investment. In fact, the same, at 0.5%, is very nominal, recommending itself to an easy acceptance, eschewing the charge of being harsh. In view of the above, no fault can be found with the action of the Ld. AO in making disallowance under Rule 8D(2) (i). Hence, disallowance made under Rule 8D(2) (i) at Rs. 14,58,76,907/-, being 0.5% of the average value of investment is CONFIRMED. Accordingly, the Ground No. I raised in appe....

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....nd therefore, assessee cannot take the plea that it came to the knowledge of the assessee only on the 16.08.2022 while going through the e-filing account. He submitted that it is the duty of the assessee to verify its e-filing account. He submitted that the assessee is always intimated through SMS regarding uploading of the order on the e-filing account therefore the assessee cannot argue that the order of Ld. CIT(A) came to the knowledge only on 16.08.2022. According to him, the delay in filing the appeal is due to carelessness or negligence on the part of the assessee. 6. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the Ld. CIT(A) duly uploaded the order p....

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....ed on the above ratio, the learned counsel submitted that disallowance should be restricted to 75.44% of rupees 246.78 lakhs i.e. 186. 17 lakhs, being the administrative expenses for earning dividend income. 8. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee earned dividend income of Rs. Rs. 2,19,68,85,793/- from investment in equity shares and mutual funds and claimed the entire dividend income as exempt, but did not make any suo moto disallowance before the lower authorities. The Assessing Officer recorded dissatisfaction as to the claim of the assessee and invoked Rule 8D of the income tax Rules, 1962 and determined the disallowance accordingly ....