9911796707
TMI Blog2014 (1) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... n looked into - The disallowance on account of administrative expenditure is too excess than the expenditure claimed in the Profit & Loss account and without rebutting the correctness of the assessee's claim - The order passed by the learned Commissioner (Appeals) is set aside - Decided in favour of assessee. - ITA No. 5117/Mum./2012 - - - Dated:- 6-12-2013 - Shri D. Karunakara Rao And Shri Amit Shukla,JJ. For the Petitioner : Mr. Rajesh Chamaria For the Respondent : Mr. Ravi Prakash ORDER Per Amit Shukla, J.M. The present appeal has been preferred by the assessee, challenging the impugned order 4th April 2012, passed by the learned Commissioner (Appeals)-VII, Mumbai, for the quantum of assessment passed under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee's working and has disallowed sum of Rs. 10,77,677 in the following manner:- I. Expenses directly attributable to exempt income (Depository charges) Rs. 22,497 II. Formula: A x B / C A: Expenses not directly related to exempt income (interest) i.e. (665000 + 131507) = 796507 B: Average value of investment on the opening and closing day of the previous year i.e. (319723459 + 108884)/2 1599161712) C: Average value of assets on the opening and closing day of the previous year i.e. (461411133 + 535259622)/2 = 498335377 796507 x 159916172 498335377 = 255600 Rs. 2,55,600 III. 0.5% of average value of investment in the opening and closing day of the previous year i.e. 0.5% of B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80(2)(iii) r.w.s 14A of the Act of Rs.7,99,580 is confirmed. Thus, appellant's this ground of appeal is partly allowed." 4. Before us, the learned Counsel submitted that the assessee has debited the total expenditure of Rs. 34,91,251 out of which the interest component is Rs. 7,96,507. From the balance, the assessee has itself disallowed Rs. 23,35,000 towards donation. Then again out of the balance sum, the assessee has worked out the disallowance of Rs. 46,309. He submitted that the balance expenditure debited after all the disallowance come to approximately Rs. 3 lakhs and odd. Even these expenses which are in the form of rates and taxes, legal and professional charges, auditor's remuneration, depreciation and bank charges, are very mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee has itself disallowed the depository charges of Rs. 21,954. Thus, to the extent of Rs. 21,954, this amount has been added twice and such disallowance has to be removed under section 14A r/w rule 8D. Now, coming to the disallowance of Rs. 7,99,580, which has been worked out at 0.5% of the average value of investment, it is seen that the assessee has debited total expenditure of Rs. 34,91,251. If the interest expenditure of Rs. 7,96,507 which has been deleted by the learned Commissioner (Appeals) and donation amount of Rs. 23,35,000 which itself was disallowed by the assessee in its computation of income, then, the balance expenditure under the administrative head is Rs. 3,59,744 i.e., [Rs. 34,91,251 (-) 7,96,507 (-) Rs. 23,3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned, the assessee's plea has already been accepted that no borrowed funds have been utilized for the investment purposes. Regarding the administrative expenditure, no satisfaction about the correctness of the assessee's claim has been looked into. Under the totality of the facts and circumstances of the case and the nature of expenditure which has been discussed above, we are of the considered opinion that the disallowance of Rs. 7,99,580 on account of administrative expenditure is too excess than the expenditure claimed in the Profit Loss account and without rebutting the correctness of the assessee's claim, the disallowance offered by the assessee at Rs. 46,309, cannot be tinkered with. Consequently, we set aside the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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