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2015 (11) TMI 1543 - AT - Income TaxTDS u/s 194J - transaction charges paid to stock exchanges - disallowance u/s. 40(a)(ia) - Held that:- The matter is restored to the file of the assessing authority who shall delete the disallowance u/s. 40(a)(ia) upon verification of the assessee’s claim, i.e., of payment of the tax on the impugned sum by BSE (payee) as the assessee in the present case has already furnished a certificate from BSE by including the same in its income offered to tax for the year. In other words, that the condition of the amended section 40(a)(ia) stands met. Addition on account of brokerage income - Held that:- The assessee claiming to have paid tax in a higher sum, the onus to exhibit so is on it. The assessee’s accounts having been since audited, the (service) tax return, as furnished subsequently, would only be in conformity with the audited accounts, reflecting the service tax as having been paid in excess – by whatever amount. That is, the validity of the assessee’s claim would get proved with reference to its audited accounts and tax return/s. The matter cannot be decided on the basis of bald/unsubstantiated claims. The Revenue authorities ought to have called for the said returns. Under the circumstances, it is considered only proper and in the interest of justice that the matter is restored back to the assessing authority to allow the assessee an opportunity to establish its claim/s. Disallowance u/s. 14A r/w rule 8D - Held that:- Disallowance u/s. 14A is only of the expenditure incurred. However, when the assessee claims to have not incurred any expenditure, it is it on which the onus to exhibit the same lies. The law prescribes the said exhibition to be with reference to its accounts (section 14A(2) r/w s. 14A(3)), so that where not so done, the prescription of rule 8D shall apply. In the present case, the disallowance is not qua any direct expenditure or indirect interest expenditure, but qua indirect, administrative expenditure, covered under rule 8D(2)(iii). No material has been led even before the tribunal to show that no administrative expenditure, i.e., relating (directly or indirectly) to tax-exempt incomes, stands incurred by the assessee for the relevant year. The presumption in law would under the circumstances hold. The Revenue has in my view rightly invoked the decision by the Hon'ble jurisdictional High Court in Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT ), which is explicit on the point (refer paras 81 to 85 of the Reports). Decided accordingly, and the Revenue succeeds. Charge of interest u/s.234 (implying sections 234A, 234B and 234C in-as-much as there is no section 234) and initiation of penalty u/s.271(1)(c). The charge of interest is mandatory, while the initiation of penalty proceedings is not appealable. The ground is accordingly dismissed.
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