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2013 (5) TMI 580 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - Held that:- No disallowance under section 14A is called for when the assessee has not incurred and claimed any expenditure for earning the exempt income. It is all the more necessary that AO has to examine the accounts of assessee first and then if he is not satisfied with the correctness of the claim, only he can invoke Rule 8D. No such examination was made or satisfaction was recorded by AO in this case. It was noticed that AO has not considered the claim of the assessee at all and he has straightway embarked upon computing disallowance under Rule 8D on the presumption that port folio management involves atleast 2% of charges. Disallowance under section 14A required finding of incurring of expenditure and where it was found that for earning exempted income no expenditure had been incurred, disallowance under section 14A could not stand. Assessee itself disallowed the interest which is directly applicable, Dmat charges and administrative exp on estimation. AO has not examined any expenditure claimed in P& L account so as to relate to exempt income, nor gave afinding that assessee claim is not correct for any reason. Rule 8D can not be invoked directly without satisfying about the claims or otherwise. Consequently, the disallowance was not permissible. In favour of assessee. Disallowance u/s 40(a)(ia) - non deduction of TDS on payment in lieu of profession fee - Held that:- It is a case of reimbursement of amount paid to Raymond Ltd. who made payment to Mr. Dinesh Kumar, which has no income element in so far as the recipient, i.e. Raymond Ltd. is concerned. TDS provisions can only be invoked if a receipt by the recipient from the payer has an element of generation of income. If the element of income cannot be established, provisions of section 40(a)(ia) cannot be invoked. In favour of assessee. Professional fee paid to Mahajan & Aibara disallowed - Held that:- Before the revenue authorities, the assessee did not make any effort to establish the seriousness and genuineness of the project and expense incurred thereon. Merely making a statement that a feasibility report was got prepared for a proposed line of business, which finally was aborted, cannot qualify for the allowance of an expense, because, the first onus is on the assessee to establish the correctness and genuineness of the expense claimed, which the assessee has failed. Against assessee. Charge of interest under section 234C - Held that:- Interest though mandatory, can be charged if only there is a shortfall on the installments of payment of advance tax calculated on the basis of tax due on returned income and does not involve the tax due on assessed income. Therefore, set aside the direction of the CIT(A) and modify the same by directing the AO to charge interest under section 234C if at all, on any shortfall in the installments in each of the quarter calculated on the basis of tax due on returned income in accordance with law. In favour of assessee for statistical purpose. Compensation received on amenities - income from other sources v/s income from house property - Held that:- Decided in favour of assessee relying on own case & decision of Bhaktawar Constructions Pvt. Ltd. [1985 (10) TMI 55 - BOMBAY High Court] directing AO to assess the compensation received as "Income from house property". Against revvenue.
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