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TMI Blog2014 (9) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... dition u/s 14A r.w. Rule 8D even when the A.O. had made a proximate cause for disallowance of Rs. 13,58,751/- under section 14A of the I.T. Act. 2. On the facts and in the circumstances of the case and in law, whether the ld. CIT(A) was justified in relying on his own order of the earlier year thereby ignoring the fact that the A.O. had differentiated the facts of the present case from that of the earlier year. 3. The appellant prays that the order of CIT (Appeals) on the above ground be set aside and that of the Assessing Officer restored." 3. Rival contentions have been heard and perused the records. Facts in brief are that the assessee is a film artist by profession. Assessee was in receipt of tax free income. During the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made any claim of expenditure incurred in relation to exempt income, therefore, the provisions of section 14 A (1) r.w.s. 14A(2) of the Act are not attracted. The AO has also not given any findings on whether the assessee has made a claim of expenditure in relation to exempt income and the claim is not correct. It is seen that the assessee has earned dividend of Rs. 10,245/- which has been directly credited to bank through ECS. The interest of Rs. 69,90l/- received on PPF, for which a journal entry is passed on 31-3-09 and similarly, interest of Rs. 66,02,652/- on tax free Bonds is credited by journal entries passed on 3 1-3-09. Thus, no expenditure has been earned for earning exempt income. Therefore, there is no proximate cause for disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been incurred for earning exempt income. From the records, we also find that the expenditure mentioned by the A.O. was in relation to the professional income earned by the assessee which is taxable under the Income Tax Act, there is no reason to disallow the expenses incurred for earning he taxable income. The findings so recorded by the ld. CIT(A) at para 1.3 of his order has not been controverted by the Department by bringing any positive material on record. Accordingly, we do not find any reason or infirmity with the order of the ld. CIT(A) in deleting the disallowance of Rs. 13,58,751/- made by the A.O. u/s 14-A of the Act. Deletion of similar disallowance was also confirmed by Tribunal in the immediately preceding A.Y. 2008-09 vide ..... X X X X Extracts X X X X X X X X Extracts X X X X
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