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2021 (9) TMI 972 - AT - Income TaxDisallowance of deduction claimed u/s. 35(2)(AB) - excessive weighted deduction - HELD THAT:- We found substance on the findings recorded by the lower authorities. Even before us, the ld. Authorised Representative could not controvert the findings of the Lower authorities. On perusal of record, we find that the expenditure incurred by the assessee towards professional charges, rent and electricity and maintenance are expenditure incurred by the assessee which has not been disputed by the revenue authorities, therefore in the interest of the justice it can be allowed u/s. 37(1) of the Act. Therefore, we remit the issue back to the file of AO with a direction to allow the expenditure incurred under the said heads u/s. 37(1) in accordance with law after providing reasonable opportunity of being heard to the assessee in the matter. Grounds raised by the assessee on this issue are treated as allowed for statistical purposes. Disallowance u/s. 14A rwr 8D - HELD THAT:- We deem it fit and proper to remit the issue back to the file of the AO with a direction to examine the details which will be filed by the assessee before him regarding establishing of having own funds on the particular date of making investments and decide the issue in accordance with law after providing reasonable opportunity of being heard to the assessee. The assessee is directed to substantiate its case that he had sufficient own funds on the particular date of making of investments. Disallowance under rule 8D(2)(iii), the claim of the assessee is that the dividend earned by the assessee was directly credited to its bank account without any effort from it and hence, there was no administrative expenditure warranting disallowance. As per rule 8D(2)(iii), the disallowance is to be made only on the average value of the investment from which the assessee yielded exempt income. Therefore, the issue is remitted to the file of the AO to recalculate the average value of the investment from which the assessee has received exempt income and disallow as per rule 8D(2)(iii) of the Rules. The ground No. 3 is allowed for statistical purposes.
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