Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (3) TMI 1111 - ITAT MUMBAI

2015 (3) TMI 1111 - ITAT MUMBAI - TMI - Disallowance u/s 14A - Held that:- AO has to examine the nature of expenditure vis-a-vis the earning of the exempt income. Here in this case the assessee had offered ₹ 2,40,000/- for the purpose of disallowance. However, the AO without examining the same has proceeded to apply rule 8D, as if it is a natural corollary to section 14A. The basic requirement the law is to examine the nature of the expenditure which can be said to attributable for the ear .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g himself about the assessee’s correctness of the claim. In absence of satisfying the mandatory requirement as given in sub-section (2) of section 14A, the disallowance offered by the assessee under rule 14A cannot be tinkered with and also it appears to be reasonable looking to the overall indirect expenditure incurred by the assessee. - Decided in favour of assessee - ITA no. 7370/Mum/2012 - Dated:- 20-3-2015 - SHRI D.KARUNAKARA RAO, AM AND SHRI AMIT SHUKLA, JM Appellant by : Shri Vijay Mehta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ent of property and treasury operations. During the year, the assessee has earned dividend income of ₹ 64,21,691/- which was claimed as exempt. For the purpose of disallowance u/s.14A, the assessee had offered a sum of ₹ 2,40,000/-, in its computation of income. In response to the show cause notice, as to why the disallowance u/s.14A should not be made in accordance with the provisions of Rule 8D, the assessee submitted that, if the overall accounts and nature of expenditure is taken .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Accordingly, he worked out the disallowance under clause (iii) of Rule 8D at ₹ 26,45,200/- by taking 0.5% of average investment attributable for indirect expenses. 3. In the first appeal Ld. CIT(A) too confirmed the said disallowance on the ground that the rule 8D is mandatory from assessment year 2008-09. However, he agreed with the assessee s contention that the bank deposit of ₹ 9.98 crores with the HDFC Bank in not to be included in opening and closing investment for calculating .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ounts and nature of expenses is to be considered. Here in this case, assessee s administrative expenses is at ₹ 7,28,722/-; employee costs at 1,020,555/-; and Finance Charges is of ₹ 14,596/-. Apart from this, there are no major expenses which have been debited, in the P & L account except for depreciation. On these facts, it cannot be held that such a huge expenditure is to be attributed for the purpose of disallowance, under clause (iii) of rule 8D, when assessee s core busines .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

apply rule 8D. Here, in this case the Assessing Officer has not recorded his satisfaction nor expressed any opinion about the correctness of the claim of the assessee. Thus, looking to the facts and circumstances of the case, no further disallowance over and above the sum offered by the assessee should be disallowed. 5. On the other hand, Ld. DR strongly relied upon the order of the CIT(A) and submitted that disallowance has to be worked out in accordance with the rule 8D, once provisions of 14A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion has to be removed which has nothing to do with the investment in shares. The balance expenses which had been debited, works out to ₹ 17,63,873/-. From the schedule of investment, it is seen that most of the investment have been made in mutual funds and deposits in the HDFC Ltd. Some of the investment has already been directed by the CIT(A) to be excluded. If the nature of investment and overall indirect expenses is taken into consideration, then it cannot be said that such a huge disal .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version