Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (11) TMI 900 - AT - Income TaxAddition u/s 14A - Held that:- When dividend is not taxable at all, the expenses pertaining to that would also not be allowable because there is no taxable income of the assessee against which such expenses can be allowed. Further, sub-section (2) of section 14A empowers the AO to determine the amount of expenditure incurred in relation to exempt income in accordance with the method as may be prescribed. The method has since been prescribed by insertion of rule 8D of the I.T. Rules, 1962 w.e.f. 24.03.2008. Sub-section (3) of section 14A mandates that the above provisions of sub-section (2) shall also apply to a case where an assessee claims that no expenditure has been incurred by him in relation to exempt income. The constitutional validity of section 14A read with sub-sections (1), (2) and (3) thereof has since been upheld in the case of Godrej & Boyce Mfg. Co. Ltd. vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT]. Considering the above, the impugned addition of ₹ 8,31,908/- made by the AO by applying rule 8D read with section 14A of the Act has rightly been confirmed by the ld. CIT(A). In view of the above facts and circumstances of the case, the order of the ld. CIT(A) on the issue is confirmed and ground raised by the assessee is dismissed. Purchase of assets - assets purchased were capable of personal use - Held that:- We find that no plausible explanation has been given either before the authorities below or even before us. Therefore, the assets purchased by the assessee, like furniture and mobile set are capable of personal use. Accordingly, in the absence of any satisfactory explanation, we do not find any infirmity in the order of the ld. CIT(A) who has rightly confirmed the action of the Assessing Officer. Thus, Ground No. 2 of the assessee is dismissed. Disallowance on account of unconfirmed creditors - Held that:- CIT(A) has not commented upon such demand letter and has not made any enquiry in this regard. In the interest of justice, the matter is set aside to the file of the ld. CIT(A) who will conduct proper enquiry and find out whether the creditors are still outstanding and genuineness of the demand letter so placed on record. Accordingly, Ground No. 3 is allowed for statistical purposes Non deduction of TDS on fees paid to arbitrators - Held that:- We do not agree with the submissions of the assessee since the TDS is deducted on services rendered whether legal, technical or as mentioned in section 194J of the Act. Therefore, tax required to be deducted. We find no infirmity in the order of the ld. CIT(A) and thus Ground No. 4 of the assessee is dismissed. Disallowance for personal use on account of travelling expenses and telephone expenses @ 10% - Held that:- . The assessee is not maintained any record for use of vehicle and telephone and therefore, personal use cannot be ruled out and also no account for business promotion has been maintained and, therefore, personal use at this juncture, can also not be ruled out. Expenses appear to be quite reasonable. Therefore, we find no infirmity in the order of the ld. CIT(A) who has rightly confirmed the action of the Assessing Officer in this regard. Accordingly, Ground No. 5 is dismissed. Disallowance of loss for long term capital gain as per revised computation - Held that:- As a matter of facts, the assessee filed revised computation during the course of assessment proceedings which was not accepted by the authorities below for the reason that the assessee should have made the claim through revised return. It is settled law that the claim which is legally permissible should otherwise be allowed by the Assessing Officer which, in fact, has not been allowed in the present case and, therefore, the matter is set aside to the file of the Assessing Officer who will allow the claim after verifying the genuineness of the computation of loss as per revised computation filed during the assessment proceedings. Thus, Ground No. 6 of the assessee is allowed for statistical purposes.
|