Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (2) TMI 895 - AT - Income TaxDisallowance u/s 14A - CIT(A) deleting the addition made u/s 14A on account of disallowance of expenditure incurred in earning dividend income - Held that:- Once the Assessing Officer has any reason to doubt the expenditures and is not satisfied with the correctness of the claim of the assessee in respect of such expenditures in relation to the income which does not form part of the total income under the Income-tax Act, the Assessing Officer shall determine the amount of expenditures so incurred in accordance with such method as may be prescribed under rule 8D of the Rules. No option was given to the Assessing Officer to adopt different formula to compute the amount of expenditures incurred in relation to such income which does not form part of the total income under the Act. Only two options are left with the Assessing Officer - one is to accept the expenditures claimed by the assessee and if he disputes the same, he has to compute the expenditures by adopting the formula laid down in rule 8D of the Rules. Once provisions of section 14A of the Act are to be invoked, the disallowance is to be computed as per rule 8D of the rules. In the instant case, nothing has been brought on record to demonstrate that there was any incorrectness in the computation of disallowance as per rule 8D. It was simply contended that disallowance under section 14A of the Act cannot exceed the receipt of dividend income. This aspect has already been examined by us in the foregoing paragraphs. Since no dispute has been raised with regard to the computation of disallowance as per rule 8D, we find no infirmity therein and accordingly we confirm the order of the Assessing Officer after setting aside the order of the ld. CIT(A), as the ld. CIT(A) has granted relief to the assessee without looking to the mode of computation as per rule 8D of the rules. - Decided in favour of revenue.
|