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2014 (8) TMI 1090 - AT - Income TaxDisallowance u/s 14A - administrative expenses which has been made after taking 0.5% of the average investment value, as envisaged in rule 8D - Held that:- No effort was made or any time was consumed for making any analysis of the investment which has resulted into exempt income of ₹ 26,310, by way of dividend. The assessee has already disallowed the sum of ₹ 1,200 on account of demat charges which is sufficient and directly attributable to the exempt income. Under these facts and circumstances, we are of the opinion that simply relying on rule 8D, for the purpose of disallowance, cannot be held to be applicable, because the Assessing Officer having regard to the accounts of the assessee as well as the nature of expenses incurred which can be said to be attributable for the earning of exempt income, has not pointed out what are the expenses which could be said to be have been incurred or attributable on the administrative expenses. Only when the Assessing Officer is not satisfied with the correctness of the claim of the assessee, he can proceed to apply rule 8D. In this case, such a requirement has not been fulfilled by the Assessing Officer. Accordingly, we do not find any merit in the disallowance made by the Assessing Officer under rule 8D and accordingly, the disallowance made by the Assessing Officer under rule 8D and confirmed by the learned Commissioner (Appeals) stands deleted. - Decided in favour of assessee
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