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2015 (12) TMI 25 - ITAT MUMBAI

2015 (12) TMI 25 - ITAT MUMBAI - TMI - Disallowance u/s 14A r.w.r 8D - Held that:- In view of the decision from Hon’ble jurisdictional High Court in Godrej & Boyce (2010 (8) TMI 77 - BOMBAY HIGH COURT) we restor the matter back to the file of the Assessing Officer to consider the calculation of the assessee for disallowable expenditure in accordance with law by analyzing/verifying investments vis-à-vis borrowed funds after providing reasonable opportunity of being heard to the assessee. - Decide .....

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. During hearing of this appeal, we have heard Shri Rishabh Shah, ld. counsel for the assessee and shri Chandip Singh, ld. DR. At the outset, the ld. counsel for the assessee did not press ground no.2 (ITA NO.6680/Mum/2013) with respect to disallowance of ₹ 2,03,162/- under the head share issue expenses. The ld. DR had no objection, therefore, this ground is dismissed as not pressed. 2.1. With respect to rejection of claim of assessee u/s 14A(2) read with Rule 8D of the Income Tax Rules. I .....

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ered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion of the order dated 23/11/2012 (A.Y. 2008-09) for ready reference:- This appeal by the assessee is directed against the order of the CIT[A]-18 Mumbai dated 29.07.2011 pertaining to the assessment year 2008 -09 . 2. The assessee has shown its grievance by raising two grounds of appeal.By Ground No.1 , the assessee has challenged the correctness of the ord .....

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assessee. 4. During the course of the assessment proceedings the AO noticed that the assessee has earned dividend income of ₹ 11096991.00 which it claimed to be exempt from tax . The AO observed that the assessee has not attributed any expenditure for earning exempt income nor it has disallowed any expense in its computation of income for the year under consideration. The AO invoked the provisions of sec.14A r.w rule 8D of the Act, and calculated the disallowable expenditure at ₹ 14 .....

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against the facts of the case and provisions of sec.14A[2] . The counsel argued that the AO grossly erred in not accepting the computation of disallowable expenditure as submitted by the assessee during the course of the assessment proceedings. The counsel drew our attention to the working exhibited at page 2 of the paper book submitted during the course of this appellate proceeding and submitted that the total disallowable expense comes to only ₹ 2,200.00. 7. Per contra Ld. DR relied upon .....

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nt upon the AO to first verify the disallowable expenditure as calculated by the assessee in the light of the provisions of Sec.14A[2] of the Act, which is as under: 2) The Assessing Officer shall determine the amount of expenditure incurred in relation to such income which does not form part of the total income under this Act in accordance with such method as may be prescribed, if the Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the .....

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