TMI Blog2014 (6) TMI 705X X X X Extracts X X X X X X X X Extracts X X X X ..... are not justified in disallowing out of expenditure involved on account of interest. Percentage of the exempt income can constitute a reasonable estimate for making disallowance in the years earlier to the AY 2008-09 - disallowance ranges between 2 to 5 percentage of the dividend income – thus, it would be just and reasonable that 2% of the exempt income would constitute a reasonable disallowance on account of indirect expenses for earning the exempt income u/s 14A of the Act – Decided in favour of Assessee. - ITA No.67 /L/2010 - - - Dated:- 9-6-2014 - Shri Sanjay Arora And Dr. S. T. M. Pavalan,JJ. For the Petitioner : Shri Yogesh Thar For the Respondent : Shri Sambit Mishra ORDER Per Dr. S. T. M. Pavalan, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses as indirect expenditure for earning the exempt income. It is noteworthy to mention that the AO has applied Rule 8D of the Income Tax rules for working out the said disallowance. On appeal, the Ld. CIT(A) upheld the disallowance made by the AO as it was mandatory for the AO to determine the amount of expenditure in relation to be exempt income in accordance with the prescribed under Rule 8D. Aggrieved by the impugned order, the assessee is in appeal before us. 4. Having heard both the sides as perused the material on record, it is pertinent to mention that the impugned disallowance has been made/confirmed by the AO/Ld. CIT(A) by applying Rule 8D of the Income Tax Rules 1962. As held by the Hon ble Bombay High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the A.Y.2008-09. Depending on the facts in each case, such disallowance ranges between 2 to 5 percentage of the dividend income. In this connection, it is the contention of the assessee that Rs.3,22,637/- being 25% of the expenses incurred by the Mumbai office would constitute a reasonable disallowance. Alternatively, the Ld.AR has contended that 1% of the exempt income as disallowed by the AO which has been confirmed by the Tribunal in the assessee s own case for the A.Y.2001-02 may constitute a reasonable disallowance. Whereas the Ld.DR has vehemently argued for upholding the order of the Ld.CIT(A). After considering the entirety of facts and contention of both sides, we are of the considered view that it would be just and reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
