TMI Blog2012 (5) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... eting the addition made by AO on account of disallowance of expenses against exempt income by applying section 14A of the Act r.w.r. 8D of I. T. Rules, 1962 (hereinafter referred to as the Rules ). For this, revenue has raised following ground no.1: 1. That in the facts and circumstances of the case, Ld. CIT(A) erred in law in deleting the addition of ₹ 54,73,997/- made by the AO u/s. 14A since it is clear in the Act that expenses relating to exempted income should be disallowed u/s. 14A applying Rule-8D. 3. We have heard rival submissions and gone through facts and circumstances of the case, Brief facts are that the assessee company is engaged in the business of share dealing having turnover of ₹ 616,95,68,760/-. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Rules, the AO has to record a satisfaction about the incorrectness of the claim of expenditure made by assessee or on the claim made by assessee that expenditure has been incurred in relation to income which does not form part of the total income under the Act for such previous year. In that eventuality he made disallowance by invoking the provisions of section 14A of the Act r.w.r. 8D of the Rules. There is no whisper in the order of the AO about correctness of the books of account of assessee or the claim of expenditure is not correct or the same is in relation to exempt income. In the absence of such finding, the AO cannot make any disallowance. Hence, we confirm the order of CIT(A) deleting the addition with the above reasoning. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able from the income tax computed against the total income computed under section 115JB of the Income Tax Act, 1961. The term total income has been defined under the Income Tax Act, 1961 as the total amount of income referred to in section 5, computed in the manner laid down in this Act. Section 5 of the Income Tax Act, 1961 defines the scope of the total income of a resident or a non-resident person. The total income of the assessee has to be computed under the regular provisions of the Income Tax Act, 1961 and in the case of a company it can be arrived at both under the regular provisions of the Income Tax Act and under the deeming provision under section 115JB of the Act. It has been provided that where the income tax payable by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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