TMI Blog2013 (12) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... ER Per Shri Shamim Yahya, AM: This appeal by revenue is directed against the order of CIT(A) dated 13.02.2012 and pertains to AY 2008-09. 2. The issue raised is that CIT(A) erred in deleting the disalloance of Rs.48,50,808/- made u/s. 14A of the I. T. Act. 3. In this case, the AO noted that assessee has earned dividend income of Rs.17,300/-. AO found that the expenses relatable to above exempt income has not been included back to the total income for taxation. AO noted that assessee had direct expenses as Demat charges for Rs.17,287/- which is added back as per Rule 8D. AO further noted that assessee paid interest for Rs.1,81,47,891/-. Hence, as per point 2 of Rule 8D Rs.48,50,808/- was disallowed. The assessee submitted a calculat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom which exempt income is earned AY 08-09 AY 07-08 Investments 500,000 500,000 Stock 33,083,199 220,397,172 33,583,199 220,897,172 Average investment = Rs.127,240,186/- 7. Therefore, 0.5% of Average investment of Rs.127,240,186/- comes to an amount of Rs.6,36,201/-. The disallowance of Rs.6,36,201/- is upheld as expenditure relating to earning of dividend income in addition to the direct expenses of Demat charges of Rs.17,287/-. Therefore, total disallowance of Rs.6,53,488/- is upheld as expediture relating to earning of dividend/exempted income. The appellant has received dividends amounting to Rs.12,22,072/- only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds. We find that in the decision cited above, the Tribual has held as under: "9. So far as the case before us is concerned, as will be clearly discernible from the observations of the learned CIT(A) extracted earlier in this order, learned CIT(A) has upheld disallowance under section 14 A in respect of even indirect expenditure, but he has merely held that the provisions of rule 8 D donot come into play in this case as the shares are not held as 'investments'. As learned counsel rightly contends the provisions of rule 8D can never be applied in a case where exempt income yield assets are not held as investments, and that the related assets, i.e. shares, having been held as stock in trade all along, there is no occasion to invoke rule 8 D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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