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TMI Blog2014 (1) TMI 1229X X X X Extracts X X X X X X X X Extracts X X X X ..... in High Court and Supreme Court. The return of income for the year under consideration was filed by him on 30-9-2008 declaring total income of Rs. 17,91,15,983/-. In the said return, other income shown by the assessee was Rs. 7,15,62,506/- which was mainly comprising of exempt income. During the course of assessment proceedings, the assessee was called upon by the A.O. to explain as to why disallowance of expenses incurred in relation to the exempt income should not be made as per the provisions of section 14A read with Rule 8-D of the Income Tax Rules, 1962. In reply, it was submitted by the assessee that the expenses in the P&L account claimed by him were entirely related to the professional income and there were no expenses which could b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also seen that there is change in investment from last year to the current year. The appellant has debited RPMS expenses of Rs.15,897/-, security transaction expenses at Rs.3,16,729/- and RPMS expenses of Rs.18,846/- in the P&L Account under the heard "Professional, administration and other expenses" which are directly related to earning of exempt income. Therefore, claim of the appellant that no expenditure has been incurred for earning of exempt income cannot be accepted as the direct expenditure relating to exempt income has been debited to P&L Account. It is true that the appellant has disallowed the direct expenses while computing professional income but this does not absolved to invoking of the Provisions of section 14A of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to Rs. 3,00,67,163/- was earned by the assessee during the year under consideration in addition to the tax free interest income of Rs. 11,36,311/- from RBI and Rs. 3,13,663/- interest on PPF. Although it has been contended on behalf of the assessee before the authorities below as well as before us that no expenditure in relation to the earning of this exempt income was incurred during the year under consideration, we agree with the authorities below that going by the magnitude of the investment activity of the assessee and the quantum of exempt income earned thereon, certain common expenses incurred on office and administration incurred by the assessee should be attributable partly to the investment activity of the assessee which result ..... X X X X Extracts X X X X X X X X Extracts X X X X
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