TMI Blog2018 (2) TMI 1818X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the assessee company after completing studies abroad as per Agreement with the assessee company. Since the disallowance being expenses for sponsoring higher education of Shri Yash Kajriwal was disallowed only on the basis that he was not an employee, the disallowance is directed to be deleted. As far as the remaining sum of ₹ 5,15,759/- assessee submitted that no details whatsoever were called for and prayed that the issue may be set aside to the AO to enable the assessee to give the required details. Since the assessee was not called upon to explain the details of these expenses by the AO it would be just and proper to set side the order of the CIT(A) , as far as the remaining sum ₹ 5,15,759/- is concerned. We set aside the order of the CIT(A) and remand to the AO for fresh consideration after due opportunity to the assessee the disallowance of foreign travel expenses - Appeal by the assessee is partly allowed. - ITA No.1433/Kol/2016 - - - Dated:- 2-2-2018 - Shri N.V. Vasudevan And Shri Waseem Ahmed, JJ. For the Appellant: Shri S.M. Surana, Advocate For the Respondent: Shri Amitava Bhattacharyya, Addl. CIT, Sr.DR ORDER N.V.Vasudevan, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 8D of the IT Rules, 1962. The assessee relied on the following decisions in support of the above contention :- Kolkata Tribunal in the case of Laurel Securities Pvt Ltd Vs I.T.O in ITA No.1849/Kol/2012 Kolkata Tribunal ln the case of .DCIT . v Ashish Jhunjhunwala in ITA No. 1809/Kol/2012. Kolkata Tribunal in the case of Balarampur Chini Mills Limited reported in 140 TTJ 73. Kolkata Tribunal in the case of DCIT - Vs- Micro Management in I. T.A.No. 1399/Kol/2011. Mumbai Tribunal in the case of-J.K.Investors -(Bombay) Ltd. Vs. ACIT in ITA No.7858/Mum/2011, AY 2008-09 dated 13.03.2013. Mumbai Tribunal in the case of 3DPLM Software Solutions Ltd. Vs. ACIT in ITA No.5736/Mum/2012, AY 2008-09 dated 31.7.2014 Delhi Tribunal in the case of DCIT Vs Mls. Jindal Photo Limited in ITA No. 814 /DEU.2011 pronounced on 23.9.2011. 6. The assessee also submitted that disallowance of interest in terms of Rule 8(2)(ii) of the Rules were not warranted as the assessee has sufficient interest free fund. The assessee pointed out that the investments in shares were only to the tune of ₹ 1 crore whereas the assessee s capital and reserves were more than Rs.,7.57 crores. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e invoked when the AO is not satisfied having regards to the accounts of the assessee that the claim of the expenses made by the assessee is not correct. Reference was also made to a similar ruling of the decision of the Hon ble Calcutta High Court in the case of Dhanuka Sons vs CIT 201 Taxman 105 (Kol). The ld. DR relied on the order of the AO. 11. We have considered the rival submissions. A perusal of the provisions of section 14A, more specifically sub-section (2), shows that if the AO is not satisfied with the correctness of the claim of the assessee, then the AO shall determine the amount of expenditure incurred in relation to such income, which does not form part of total income under the Act. For this the method is prescribed in rule 8D. The provision of section 14A, sub-section (3) specifies the provision of 14A(2) would also apply where the assessee makes a claim that there is no expenditure incurred. This is because if the assessee does not make a disallowance under section 14A in its computation of total income, when filing the return, then if subsection (3) was not available, the AO might not be able to make a disallowance under section 14A. Thus, where the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered the submissions of the authorized representative of the appellant as well as the assessment order framed in the light of the materials available on record before the assessing officer during the assessment proceedings. The AO has mentioned that during the year under consideration, Sri Kajriwal was not associated with the company and did not serve the company in any capacity. As such, the expenses related to his studies cannot be said to be incidental in the conduct of business activities of the company. As regards remaining expenses of ₹ 5,15,759/- no business connection could be established as the assessee never had any export activity. The assessee has failed to prove the business connection of these expenses 'as claimed by him during the year under consideration. Keeping in view of above, he order of the AO is upheld and this ground of the appeal is dismissed. 15. Aggrieved by the order of CIT(A) the assessee has raised ground no.4 before the Tribunal. 16. The ld. Counsel for the assessee placed reliance on the decision of the Hon ble Calcutta High Court in the case of M/s Gournitye Tea Industries vs CIT in ITA No.249 of 2005 judgment dated 24.06.201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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