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2010 (8) TMI 975 - AT - Income TaxDisallowance u/s 14A - AO observed that the assessee had earned dividend income and claimed it as exempt u/s. 10(34), thus management expenses attributable to this income are disallowable u/s. 14A - HELD THAT:- We find that the assessee earned dividend income of ₹ 18,00,000/-. The assessee did not file any evidence in respect of any expenditure incurred by him to earn the said dividend income before the lower authorities and also before the Tribunal. In view of the above, and the consistent view taken by the Tribunal in many other cases @ 1% of the dividend income is treated as expenses related to dividend income. Therefore, the disallowance comes to ₹ 18,000/-. This ground of the assessee is, therefore, partly allowed. Disallowance of credit for TDS - AO had not given credit for this TDS as in the TDS certificate filed by the assessee, it is clearly mentioned that the tax has been deducted by the Sikkim Government as a state govt. tax and has been paid to the credit of the state Govt. and not the Central Govt - CIT(A) held that this amount has not been paid to the Central Govt. account on behalf of the assessee at all, thus upheld the decision of the AO for not giving credit for this amount - HELD THAT:- We find that before the AO the assessee claimed TDS amount deducted by the Sikkim Govt. from their bills and issued Form No. 16A as prescribed in Rule 31(1)(b). But before the Ld. CIT(A), on careful consideration, it stated that the deducted amount was not paid to the Central Govt. Account, but paid to the account of the Sikkim Govt. and also stated that this mistake was detected at the time of appeal before the Ld. CIT(A). Since the assessee took different stand before the lower authorities, we are of the considered view that the matter should be restored back to the file of the AO for verification. It is needless to say that the assessee should be given sufficient opportunity of being heard We order accordingly, This ground of appeal of the assessee is, therefore, allowed for statistical purposes.
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