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2013 (8) TMI 961 - AT - Income TaxAddition under section 14A r/w Rule 8D - Held that:- We do not find any whisper whatsoever which proves that the AO was not satisfied with the correctness of the claim of the Assessee in respect of expenditure which the Assessee claims to have incurred in relation to income which does not form part of total income having regard to the accounts of the Assessee. The AO straightaway went on applying Rule 8D while, in the first instance, the AO should have determined whether the claim of the Assessee that it has not incurred any expenditure with regard to the Dividend income is correct or not and such determination must have been made having regard to the accounts of the Assessee on objective basis. It is only when the AO is not satisfied with the claim of the Assessee, the Legislature has empowered the AO to follow the method for calculating the disallowance as may be prescribed i.e. Rule 8D. The AO instead of discharging his obligation, straightaway applied Rule 8D and made disallowance. He has put the cart before the horse which is not permissible under law. The case of the Assessee, in our opinion, is covered by our aforesaid decision in the case of Sesa Goa Ltd. vs. JCIT (2013 (9) TMI 233 - ITAT PANAJI). Addition deleted - Decided in favour of assessee Disallowance of expenditure incurred on renovation of the temple - Held that:- It is not denied that transportation of the iron ore was not possible without the co-operation of the villagers as the movement of the trucks had to be through the village where the temple was located for which the Assessee has contributed the amount for renovation. The expenditure incurred for renovation of the temple is also not denied. For carrying on the business smoothly, it was necessary for Assessee to maintain cordial relation to ensure smooth movement of the trucks otherwise the Assessee would not have been able to transport the ore from the mines to the jetty for the purpose of the export. It would have affected the export earnings and income of the Assessee. The expenditure has been incurred, in our opinion, during the course of the business. Business expediency demands such expenditure to be incurred. The expenditure is neither a capital expenditure nor personal expenditure of the Assessee. Therefore, we do not find any illegality or infirmity in the order of CIT(A) while allowing this deduction.- Decided in favour of assessee Disallowance of expenditure incurred on construction of new bridge - Held that:-It is a social obligation demanded by the local community which cannot be overlooked by the Assessee. No material or evidence was brought to our knowledge which may prove that the bridge belonged to the Assessee and it represents capital expenditure incurred by the Assessee. - Decided in favour of assessee
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