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TMI Blog2015 (7) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee, an advocate by profession, was observed during the course of assessment proceedings to have substantial investments in securities/investments yielding, or liable to yield, income not forming part of the total income, i.e., at an average of Rs. 21.71 crores for the relevant year; the assessee having for the current year earned tax-free income by way of dividend (Rs.3.23 lacs) and interest (at Rs. 39.96 lacs). Even though the assessee sought to justify its suo motu disallowance u/s.14A, made at Rs. 1 lac, the Assessing Officer (A.O.), unsatisfied therewith, proceeded with the disallowance by applying rule 8D, effecting a disallowance of Rs. 9,85,283/-. The same being confirmed in appeal by the ld. CIT(A), relying on the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind'. Accordingly, the expenditure could not be apportioned on the basis of the quantum of investment in tax-free investments visà- vis the total assets. 3.2 The ld. Departmental Representative (DR), on the other hand, would rely on the orders of the authorities below, stating that the assessee's method is arbitrary in-as-much as income could not be the basis of the allocation of the expenditure. The Revenue was thus justified in applying rule 8D, which only seeks to, in the absence of the assessee's accounts forming the basis of the suo motu disallowance u/s. 14A, the correctness of which could thus be verified with reference thereto, invoke the statutory estimate prescribed per r. 8D, which is only toward providing a uniform, non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who stand remunerated. No inquiry in this regard stands made, while the assessee has maintained proper accounts, duly audited and, further, bases his claim of having incurred a lower expenditure than that per the statutory prescription of r. 8D, thereon. The expenditure observed as relatable to the income not forming part of the total income by the Revenue are: salary (Rs. 3.54 lacs); printing & stationery (Rs. 0.11 lacs); and bank charges (Rs. 0.10 lacs), without specifying the relationship, so that the same is inferably casual. Even the claim for depreciation (Rs. 7.26 lacs) we observe as principally on law books. The ingredients of s. 14A(2) r/w r. 8D(1) are clearly not satisfied in the instant case. We, accordingly find no infirmity in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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