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 1340 - AT - Income TaxDisallowance u/s 14A - HELD THAT:- Calculation of disallowance as per Rule 8D(2)(iii) is erroneous, as the AO without assigning any reason did not reduce the investment in mutual funds and group concern which does not quire incurrence of major expenditure. We restore this ground back to the file of A.O. for fresh consideration in terms of our above discussion. Disallowance upfront brokerage fees - A.O. has disallowed the said expenses on the ground that assessee has changed its accounting policy with regard to expense on upfront brokerage fees - HELD THAT:- Looking into the nature of expenses, the same were incurred in the revenue field and the same has been incurred wholly and exclusively for the purpose of business. The change in the accounting system is not violative of any regulations issued by regulatory authorities in this regard. Furthermore change in accounting policy is bonafide and in line with the industry practice. In earlier years the assessee witnessed many times either the clients exited from the scheme or they switched to the other scheme. The same has necessitated the assessee to change their accounting practice and the assessee followed the same in all the subsequent years. It was also brought to our notice that no disallowance was made in next year while framing assessment u/s 143(3) of the Act. Accordingly, we do not see any justification for the disallowance made in respect of upfront brokerage fees actually paid by the assessee during the year under consideration. Disallowance of office renovation expenses - HELD THAT:- No doubt the expenses were actually incurred by the assessee. However, the same was disallowed on the plea that it was capital in nature. Looking to the fact that the premises were not occupied at all, therefore, there was complete loss of expenditure incurred by the assessee. In the interest of justice, this ground is also restored to the file of A.O. for fresh adjudication in terms of our above discussion and judicial pronouncement cited by ld. A.R.
|