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2015 (9) TMI 281 - AT - Income TaxDisallowance u/s 14A - AO has rejected the suo motu disallowance - Held that:- Rule 8D is applied then disallowance would work out at ₹ 37,08,098/- which is almost four times the actual expenditure claimed by the assessee. So, according to ld. AR, the disallowance has to be made, it should be confined to the actual expenditure incurred and claimed for earning exempt income. First submission of assessee that total expenditure claimed as per P&L account is ₹ 18,35,064. It has been stated that out of this amount, ₹ 2,59,835/- is the administrative expenses and ₹ 5,40,397/- pertains to the two companies which have amalgamated with the assessee, namely, M/s. Kiran Securities Pvt. Ltd. and M/s. Soarma Vinimay Pvt. Ltd. and from whom no dividend income has been earned and declared by the assessee. Thus to the said extent, according to assessee, no disallowance of expenditure of ₹ 5,40,397/- is warranted. As regards the expenditure of ₹ 15,74,196/- it is apparent that it includes a sum of ₹ 2,22,729/- (Kiran Securities Pvt. Ltd. ) and a sum of ₹ 3,17,679/- (Soarma Vinimay Pvt. Ltd.) as claimed by the ld. AR which are pertaining to amalgamating companies and further amalgamation expenses of ₹ 8,58,617 (of Mayuka Investment Ltd.), capital increase expenses of ₹ 70,000/- (of Mayuka Investment Ltd.) are claimed by the ld. AR; and loss on sale of investment ₹ 11,695/- which have no nexus with the exempt income. Thus, according to ld. AR, the said amounts cannot be disallowed. The remaining expenditure according to AR is ₹ 93,477/- (Rs.15,74,156/- - ₹ 2,22,729/- + ₹ 3,17,679/- + ₹ 8,58,617/- + ₹ 70,000/- + ₹ 11,695 (Page 57 of PB) = ₹ 93,477/-). This sum of ₹ 93,477/-, according to ld. AR, includes audit fees of ₹ 16,545/- and filing fees ₹ 2,088/-, which are in the nature of routine business/statutory expenditure. In view of the aforesaid submission of the AR, we feel that if these expenditures are considered in the light of the suo motu expenditure of ₹ 50,000/- as claimed by the assessee for earning exempt income need to be reconsidered by the AO. Therefore, we set aside the impugned order and restore the matter back to the file of the AO for deciding the issue in view of the aforesaid submissions of ld. AR and thereafter, determining the question of disallowance u/s 14A of the Act. - Decided in favour of assessee for statistical purposes.
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