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2017 (9) TMI 110 - AT - Income TaxCredit of municipal taxes paid under the had income from house property denied - Held that:- AR has demonstrated through documents submitted before the Assessing Officer that the municipal tax was paid by the assessee which is through the bank account of the assessee paid through its proprietor firm only. Therefore, Ground is allowed in favour of assessee. Addition u/s 14A - Assessing Officer made disallowance holding that some expenditure must have been incurred. - Held that:- Assessing Officer has not made any effort to record his findings as to why the claim of the assessee that no expenditure was incurred was not correct and made disallowance just by holding that some expenditure must have been incurred. Judgment of CIT Vs. Taikisha Engineering India Ltd. [2014 (12) TMI 482 - DELHI HIGH COURT] is applicable and no disallowance is warranted as it held that the Assessing Officer at the first instance must examine the disallowance made by the assessee or the claim of the assessee that no expenditure was incurred to earn the exempt income. If and only if the Assessing Officer is not satisfied on this count after making reference to the accounts, that he is entitled to adopt the method as prescribed i.e. Rule 8D of the Rules. Thus, Rule 8D is not attracted and applicable to all assessee who have exempt income and it is not compulsory and necessary that an assessee must voluntarily compute disallowance as per Rule 8D of the Rules. Also we find that the assessee was holding shares as stock in trade and not as investments as is apparent from the balance sheet of the assessee, therefore, disallowance u/s 14A was not warranted. - Decided in favour of assessee.
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