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TMI Blog2015 (10) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue is against the order of CIT(A) deleting the disallowance made by AO on account of exempt income by invoking the provision of Section 14A of the Act. For this, revenue has raised following ground No 1: "1.That Ld. CIT[A] has erred in law s well as on facts by deleting the addition of Rs. 13,41,749/- on account of U/s 14A." 3. Briefly stated facts are that the assessee has earned dividend income of Rs. 7,352/- on mutual fund and dividend of Rs. 40,678/- on shares investment, claiming the aggregated exempted income of Rs. 48,030/-. The Assessing Officer disallowed the expenses relatable exempted income by invoking the provision of Sec. 14A of the Act read with Rule 8D of the I.T. Rule, 1962 (hereinafter referred to as "the Rule") amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given of Rs. 11.9 crores to M/s East Commercial Pvt. Ltd. The entire loan had direct nexus with the taxable income. The appellant had its own sufficient funds for the investment and the loan amount has not been invested in the investments. 6. However, there are other indirect expenses amounting to Rs. 13,43,931/- as per schedule 6 of the Tax Audit Report. The appellant has not disallowed any expenses on account of administrative and establishment expenses. The Assessing Officer has calculated the eddies as per Rule 8D since the appellant is unable to establish the correctness of the claim in respect of the expenditure incurred in earning income which does not form part of the taxable income. The Income Tax Act, 1961 has provided a partic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Mutual Fund of Rs. 50,000/-; expenses on share transactions of Rs. 1,798 and Interest Paid on Mutual Fund of Rs. 4,150 and thereby totalling to Rs. 55,948/-. The appellant has claimed these expenses in the Profit and Loss Account and has not disallowed on the basis that the said investments have not yielded any income during the assessment year 2009-10. The plea of the appellant is not tenable since it is not a rule whether any investment yield an income or not but the expenses incurred on investments which may even yield exempted income in future is to be disallowed, if debited in the profit and loss account. This is a direct expenditure incurred by the appellant on the investments yielding exempted income. However, during the appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in share or mutual fund is out of borrowed funds. In view of the facts and circumstances of the case, we confirm the order of CIT(A). This issue of Revenue's appeal is dismissed. 5. Next issue in this appeal of Revenue is against the order of CIT(A) in deleting the addition of commission expenses. For this, Revenue has raised following ground No.2:- "2. That Ld. CIT[A]has erred in law as well as on facts by deleting the addition of Rs. 80,48,713/- on account of commission." 6. Briefly stated facts are that AO disallowed the commission expenses of Rs. 80,48,713/- paid to Anchor Engineers Files. According to AO, no services were rendered by recipient of commission that M/s Sunrise Trading Corporation for the receipt of commission. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also deducted at source. The books of accounts, bank statements, and, other relevant documents were produced, and, the AO has not found any defects in such books or documents. In the remand report, the AO has admitted that the nature of services rendered has been mentioned in the agreement, and, the commission agents have also confirmed rendering of services to justify the claim of commission. On the other hand, there is no material on record to show anything that could cast suspicion or doubt about the genuineness of the claim. In view of the above, there is no basis or justification for the disallowance made by the AO; and, the same is directed to be deleted. The grounds raised by the appellant are liable to be allowed.' 13. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commission agents, and, the commission paid as per the terms of the agreement. We find from records that the assessee has filed complete details before the AO. The payments were made through banking channel, and, tax was also deducted at source. The books of accounts, bank statements, and, other relevant documents were produced, and, the AO has not found any defects in such books or documents. We find that in immediately preceding assessment year, the AO in the remand report, the AO has admitted that the nature of services rendered has been mentioned in the agreement, and, the commission agents have also confirmed rendering of services to justify the claim of commission. On the other hand, there is no material on record to show anything t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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