TMI Blog2014 (5) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... een incurred, by resorting to estimation of such expenditure - For bringing any interest expenditure claimed by the assessee under the ambit of Rule 8D(2)(ii) the AO has to show that the interest is not directly attributable to any particular income or receipt - there was merit in the contention of the assessee that the investments have been made from out of the interest-free funds available with it - no disallowance out of the interest expenditure is called for in terms of S.14A of the Act, by estimating such interest expenditure as attributable to the amounts of investment - there was no merit in the appeal of the department – Decided against Revenue. - ITA No. 1614/Hyd/13 - - - Dated:- 7-5-2014 - Shri B. Ramakotaiah And Smt. Asha Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of earning the dividend income, and no specialised staff was exclusively created for the purpose of making investments, and the expenditure that is normally incurred for its regular business activities, is considered even for earning dividend income. Not satisfied with the explanation of the assessee, considering the volume of investments in the shares/mutual funds, which is very high, and observing that certain amount of expenditure incurred by the assessee even in the normal course of business is definitely attributable to the earning of dividend income, which is claimed as exempt from tax, the Assessing Officer made an estimated disallowance of Rs.10,69,818 and made addition in that behalf under S.14A of the Act. 4. On app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gone through the detailed written submissions of the assessee on this issue, besides the plethora of decisions discussed therein. It is the case of the assessee that it has not incurred directly or indirectly any expenditure to earn exempt income, and on an estimate basis, the Assessing Officer cannot presume that expenditure has been incurred by the assessee. We find merit in this contention of the assessee. The Department has not brought out any evidence to prove that the assessee has engaged any specialized staff either for making the investments in shares and mutual funds or for looking after such activities of the assessee, or to prove that any expenditure has in fact been specifically incurred for making such investments or for carry ..... X X X X Extracts X X X X X X X X Extracts X X X X
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