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2019 (4) TMI 1436 - ITAT DELHIDisallowance of interest - HELD THAT:- It is clear that AO disallowed the interest because the issue is similar as has been considered in AY 2009-10. In AY 2009-10 the Tribunal deleted the similar additions. We, therefore, following the reasons for decision for AY 2009-10 (supra) found that issue is covered in favour of the assessee. We, accordingly, set aside the orders of the authorities below and delete the addition. Disallowance u/s 14A read with Rule 8D(2)(iii) - assessee has earned income exempt from tax from dividends - assessee was asked to give details and justify the claim in view of section 14A read with Rule 8D with reference to the dividend income - HELD THAT:- As decided in assessee's own case AY 2009-10 there is no proper record of satisfaction as to the expenses incurred by the assessee for earning the exempt income. By following the decision reported in CIT vs. Taikisha Engineering India Ltd. [2014 (12) TMI 482 - DELHI HIGH COURT] and Joint Investments (P) Ltd. vs. CIT [2015 (3) TMI 155 - DELHI HIGH COURT] , we are of the opinion that the AO at the first instance should have examined the correctness of the statement made by the assessee that no expenses were incurred for earning the exempt income during the year and if and only if the Ld. AO is not satisfied on this account after making reference to the accounts, he is entitled to adopt the method under Rule 8D of the Rules. While allowing the plea of the assessee direct AO to delete the addition made on this score also. Ad hoc disallowance on account of telephone and vehicle expenses - 1/8th of these expenses was disallowed u/s 37(1) being of personal nature - CIT(A) restricted the addition to 1/10th of the expenses claimed - HELD THAT:- Entire addition is wholly unjustified. The AO has not pointed out on which items personal element was involved in claiming the aforesaid expenses. AO has not pointed out any specific item which is used by the assessee for personal purposes. It is ad hoc addition made by the AO by disallowing 1/8th out of these expenditures. It is well settled law that ad hoc addition cannot be sustained unless AO has pointed out any specific item in which personal element is involved. There was thus, no justification to make any disallowance out of these expenditures. We, accordingly, set aside the orders of the authorities below and delete the entire addition. Addition on account of electricity and water expenses - assessee has not apportioned the expenses having personal element in view of residence-cum-office nature of premises. The assessee has not installed separate electricity meter for residence and office. The assessee has also not shown such expenses in drawing account - HELD THAT:- No justification to interfere with the order of Ld. CIT(A) in sustaining the part addition . This ground is accordingly, dismissed. Revenue expenses claimed on account of upgradation/ subscription of software - HELD THAT:- Matter requires reconsideration at the level of the AO. AO has not pointed out as to which capital has been generated out of the aforesaid expenses incurred by the assessee for the purpose of profession of the assessee. AO has also not pointed out that after incurring the expenditure how the same could be considered enduring in nature. Assessee pointed out the details noted in the bills/vouchers of these expenses shows that the matter requires reconsideration at the level of the AO. We, accordingly, set aside the orders of the authorities below and restore this issue to the file of AO with direction to re-decide the issue after giving an opportunity of being heard to the assessee, after verifying the bills and vouchers produced on this issue. This ground is allowed for statistical purposes.
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