TMI Blog2013 (9) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... unds and the second investment of Rs. 5,00,000 has not been made by it. To clarify this contention, the assessee has filed the proof of investment made in the name of associate concern Brook Trading Company Pvt. Ltd. which had made the investment. Along with that a photocopy of cheque dated 1st March 2005, and the bank account was given before the Commissioner (Appeals). The Commissioner (Appeals), after verifying these details, has deleted the addition. The Commissioner (Appeals) having a co-terminus power with that of the Assessing Officer can very well examine these facts in the course of appellate proceedings. He has merely verified the assessee's contention from the copy of cheque and bank account along with the proof of investment in the name of Brook Trading Company Pvt. Ltd. Under these circumstances, it cannot be held that there is a violation of rule 46A. Thus, under these facts, the findings given by the Commissioner (Appeals) are affirmed - Decided against Revenue. Commissioner (Appeals) and, accordingly, the same is confirmed - Decided against Revenue. - ITA No. 929 and 930/Mum./2011 - - - Dated:- 6-9-2013 - Shri B. Ramakotaiah And Shri Amit Shukla,JJ. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the Tribunal, Mumbai Bench, in Rythem Exports Pvt. Ltd., [2005] 2 SOT 429 (Mum.). 3. Before the Commissioner (Appeals), it was submitted that no interest expenditure has been incurred by the assessee and, therefore, no disallowance of expenditure under section 14A can be made. In support of this contention, a copy of Balance Sheet and Profit Loss account was filed before the Commissioner (Appeals), who, after appreciating the facts, held that some disallowance should be made on account of managerial expenditure and administrative expenditure. Accordingly, he restricted the disallowance to Rs. 45,000, after observing and holding as under:- "5.4 I have considered the A.O's order as well as the appellant's A/R submission. I have also taken note of the case laws relied on by the appellant. Considering the same, I agree with the A.O. that the no income can be earned in vacuum. There must be some managerial or any other administrative expenses to earn such income. However, in my considered view, the A.O. was not correct in making proportionate disallowance without assigning any valid reason for the same. Hence, taking note of this fact, I consider it proper and appropriate to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utual funds and in respect of Reliance Mutual Funds, the assessee has made two deposits of Rs. 5,00,000 each on 29th March 2005, as per the information received from AIR. The assessee could not explain the investment in respect of one deposit of Rs. 5,00,000. The assessee denied before the Assessing Officer that it has not made two deposits but only one deposit of Rs. 5,00,000. However, the Assessing Officer added the said amount of Rs. 5,00,000 as unexplained investment under section 69 and the assessee could not prove its contention. 8. Before the Commissioner (Appeals), it was submitted that the assessee had invested only Rs. 5,00,000 and another Rs. 5,00,000 was in the name of Brook Trading Company Pvt. Ltd. and the proof of investment made by the said company was also filed along with the photocopy of cheque and bank account of the said company. It was also submitted that it was by mistake of the Accountant that Permanent Account Number of the assessee was written while making the investment for the Brook Trading Company Pvt. Ltd. Thus, the sum of Rs. 5,00,000 has been deposited by Brook Trading Company Pvt. Ltd. and not by the assessee and, therefore, the same should be del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch 2005, and the bank account was given before the Commissioner (Appeals). The Commissioner (Appeals), after verifying these details, has deleted the addition. The Commissioner (Appeals) having a co-terminus power with that of the Assessing Officer can very well examine these facts in the course of appellate proceedings. He has merely verified the assessee's contention from the copy of cheque and bank account along with the proof of investment in the name of Brook Trading Company Pvt. Ltd. Under these circumstances, it cannot be held that there is a violation of rule 46A. Thus, under these facts, the findings given by the Commissioner (Appeals) are affirmed and, accordingly, ground no.2 and 3, as raised by the Revenue are treated as dismissed. 12. In the result, Revenue's appeal for the assessment year 2005-06 is treated as dismissed. We now take up appeal in ITA no.930/Mum./2011, for the assessment year 2006-07, vide which, the Revenue has challenged the following grounds:- "1. Whether on the facts and in the drcumstances of the case and in law, the Ld. CIT(A) erred in restricting the disallowance u/s 14A to Rs. 1 lac against Rs.17,88 lacs made by the Assessing Officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gning any valid reason for the same. Hence taking note of this fact, I consider it proper and appropriate to hold that though the A.O. has not root out any material on record, but looking to the amount so earned as dividend income clearly justifies that there must be some or any kind of managerial expenses or administrative expenses to earn such income. Accordingly I restrict the disallowance to the extent of Rs.1,00,000/-. Thus, this ground of appeal is partly allowed." 15. Before us, the learned Departmental Representative relied upon the observations of the Assessing Officer and submitted that the assessee's main activity is for earning income from trading of shares, dividend and interest income. All the expenditures incurred by the assessee has bearing on the income earned. The Assessing Officer has attributed the proportion of exempt income out of the total income and has allocated the expenditure for the exempt income on the same ratio i.e., 42%. The basis given by the Commissioner (Appeals) for restricting the disallowance at Rs. 1,00,000 is without any proper basis. 16. On the other hand, the learned Counsel for the assessee submitted that all its expenditures were basi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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