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TMI Blog2016 (3) TMI 1017X X X X Extracts X X X X X X X X Extracts X X X X ..... y and the assessee corporation being only a trustee of these funds, the interest income of Rs. 5,59,454/- on such funds ought not to have been assessed as the income of the assessee corporation. 1.2 Because the funds being made available by the Government of U.P. only for disbursement to the employees of UPTRON India Limited under the Voluntary Retirement Scheme (VRS) and the Government having decided that the interest on such funds could not be appropriated by the assessee company towards its income, the learned CIT(Appeals) erred in upholding the action of the learned Assessing Officer of treating such interest of Rs. 5,59,454/- as income of the assessee company. 1.3 Because, in any case, the deposit account having been seized/ atta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accordingly, ground No. 1 is allowed for statistical purposes. 6. Ground No. 2 is as under: "2.1 Because the learned 1st appellate authority erred in confirming the addition of Rs. 40,60,400/- made by the Assessing Officer u/s 14A of the Income Tax Act, 1961 read with rule 8D of the Income Tax Rules, 1962. 2.2 Because the learned 1st appellate authority failed to appreciate that the Assessing Officer applied Rule 8D in a mechanical manner without application of mind and without regard to facts and reply of the assessee. Though the assessee on its own submitted the working of disallowance at Rs. 47,827/- being the expenditure incurred in for earning the exempt income (dividend income). Assessing officer without pointing out any mista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal order in case of Hindustan Motors Ltd. vs. DCIT in I.T.A. No.171/Kol/2012 dated 20/11/2015, paper book page No.122-131, relevant pages 127-129. (iii) Tribunal order in the case of DCIT vs. Jindal Photo Limited in I.T.A. No.814/Del/2011 dated 23/09/2011, paper book pages 68-75. (iv) Tribunal order in the case of Kalyani Steels Ltd. vs. Addl. CIT in I.T.A. No.1733/Pn/2012 dated 30/01/2014, paper book ages 58-67 of the paper book. 8. Learned D. R. of the Revenue supported the orders of the authorities below. 9. We have considered the rival submissions. First of all we examine the observations of the Assessing Officer in assessment order on this issue. In Para 5 of the assessment order, the Assessing Officer has noted that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no other basis can be considered for estimating the expenses to be disallowed u/s 14A of the Act and therefore, in our considered opinion, this observation of the Assessing Officer in the assessment order that the computation of disallowance u/s 14A is not in accordance with the provisions of Rule 8D, is categorical satisfaction and reasoning is given by the Assessing Officer for not accepting the working of the assessee and for computing the disallowance as per Rule 8D as has been done by the Assessing Officer. In the light of these facts, now we examine the applicability of various judicial pronouncements cited by Learned A. R. of the assessee. 10. The first judicial pronouncement cited by Learned A. R. of the assessee is a Tribunal dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order, the Assessing Officer has stated that the computation of disallowance u/s 14A of the Act is not in accordance with the provisions of Rule 8D and thereafter, the Assessing Officer has worked out the disallowance as per Rule 8D of the Act. We have also discussed earlier in this order that if the assessee gives actual working of the amount of expenses incurred for earning exempt income then the same has to be examined by the Assessing Officer and before rejecting the same, the Assessing Officer has to give proper reasons but if the working of the assessee is of the estimated expenditure then in our considered opinion, such working itself is not as per Rule 8D because Rule 8D prescribes a particular manner and method for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computer labs." 13. Learned A. R. of the assessee submitted that copy of Government order No.1308/78-1-2008-4I.T./2006T.C. dated 22/12/2008 is available on pages 132 to 133 of the paper book as per which it is specified that Inotech has to pay 5% of total profit to UPLC and such amount should be incurred for modernization of concerned lab. He also submitted that on page No. 76 to 82 of the paper book is the copy of submission dated 27/02/2013 before the Assessing Officer which also includes Minutes of Meeting held on 29/04/2009 wherein it was submitted before the Assessing Officer that the State Government has released the grant only for setting up of computer lab and not sanctioned any grant for running of these computer lab and as per t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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