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2014 (11) TMI 182 - HC - Income TaxExpenses incurred in earning dividend income – Disallowance u/s 14A – Held that:- A dividend income was earned and the exemption u/s 10(34) of the Income Tax Act was claimed – the Tribunal was rightly of the view that there was interest applicable on the dividend earned and only administrative expenditure was incurred and that was estimated at 5% of the dividend earned – the decision in GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] rightly followed wherein it has been held that disallowance should be reasonable estimation of the expenditure – thus, no substantial question of law arises for consideration – Decided against revenue. Rejection of books of accounts – opportunity of being heard not provided - Satisfaction about correctness or completeness of the Account properly recorded or not - Held that:- The tribunal rightly held that before the AO records satisfaction about the correctness or completeness of the accounts of the assessee, he ought to have given proper opportunity to the assessee - The books of account could not have been rejected casually - It was not done by giving proper opportunity to the assessee - without examining the basic parameters for rejection of the books of accounts the revenue goes in appeal before the tribunal, this is what is faulted by the tribunal - the complaint of the assessee before the tribunal was wholly justified – Decided against revenue.
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