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2019 (6) TMI 246 - AT - Income TaxAdhoc disallowance on travelling, car running/maintenance and direct expenses - HELD THAT:- Addition is excessive in nature. It is a fact that assessee produced the books of account and ledger account before A.O. in respect of the above expenditure. The accounts of the assessee are also audited and Auditor has given unqualified certificate in favour of the assessee. Still assessee shall have to produce some of the vouchers and bills before A.O. when called for by the A.O. at assessment stage. A.O. also did not give any specific details in the assessment order, as to which of the expenses are not admissible in nature. Therefore, returned income declared by the assessee in the light of nature of business of assessee, we are of the view that addition is excessive. The interest of justice requires that addition may be restricted to ₹ 6 lakhs only as against ₹ 12 lakhs. This would meet the ends of justice in the facts and circumstances of the case. Ground No.1 of appeal of Assessee is partly allowed. Disallowance u/s 14Ar.w.r. 8D - HELD THAT:- Addition is wholly unjustified. The Hon’ble Delhi High Court in the case of Cheminvest Limited vs. CIT [2015 (9) TMI 238 - DELHI HIGH COURT] held that no exempted income was earned by the assessee in the relevant assessment year and since genuineness of the expenditure incurred by the assessee was not in doubt, no disallowance could be made under section 14A. In the present case, assessee specifically submitted before the authorities below that investment was made in shares and agricultural land and in both the cases there were no intention to earn any exempt income and in fact, no dividend exempt from tax have been earned by the assessee. It is, therefore, clear that assessee did not earn any exempt dividend income in assessment year under appeal. Therefore, no disallowance u/s 14A could be made. Learned Counsel for the Assessee rightly relied upon decision in the case of CIT (Central)-1 vs. Chettinad Logistics (P.) Ltd. [2018 (7) TMI 567 - SC ORDER] . We set aside the Orders of the authorities below and delete the addition. In the result, Ground No.2 of appeal of assessee is allowed.
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