TMI Blog2016 (5) TMI 282X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) has taken hypothetical figure of ₹ 22,05,762/- as voluntary disallowance made by the assessee u/s 14A as against the actual disallowance made by the assessee u/s 14A to the tune of ₹ 54,217/- and this fact goes to prove that the CIT (A) has proceeded to affirm the disallowance made by the AO without going into the merit. We, therefore, restrict the disallowance of ₹ 7,01,194/-, particularly when the assessee has not proved on record as to how his figure of ₹ 54,217/- was worked out. - Decided in favour of assessee partly - ITA No. 2358/Del./2013 - - - Dated:- 29-4-2016 - Shri N. K. Saini, Accountant Member And Shri Kuldip Singh, Judicial Member For the Petitioner : Shri Ved Jain, Advocate For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowed the amount of ₹ 71,44,183/- being the expenses relatable to earning of exempt income u/s 14A read with Rule 8D of the act and assessed the total income at ₹ 20,25,146/- 3. Assessee has carried the matter before the ld. CIT (A) who has dismissed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. The ld. AR for the assessee challenging the impugned order contended inter alia that the assessee on its own submitted before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment = % of 34571230 = 172856 Total Disallowance 69,71,327 + 1,72,856 = 71,44,183 In view of the above a sum of ₹ 71,44,183/- is disallowed towards expenses relatable to earning of exempt income u/s 14A (r/w Rule 8D) of the Income Tax Act. 8. Perusal of the order passed by the AO as well as ld. CIT (A) apparently goes to prove that they have computed the disallowance without recording their satisfaction and without recording reason to reject the computation made by the assessee. So, we are of the considered view that since the AO has not recorded objective satisfaction as required under sub-section (2) of section 14A that he is not satisfied with the correctness of the claim made by the assessee in respect of the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im or explanation. The second aspect is there appears to have been no scrutiny of the accounts by the AO - an aspect which is completely unnoticed by the CIT (A) and the ITAT. The third, and in the opinion of this court, important anomaly which we cannot be unmindful is that whereas the entire tax exempt income is ₹ 48,90,000/-, the disallowance ultimately directed works out to nearly 110% of that sum, i.e., ₹ 52,56,197/-. By no stretch of imagination can Section 14A or Rule 8D be interpreted so as to mean that the entire tax exempt income is to be disallowed. The window for disallowance is indicated in Section 14A, and is only to the extent of disallowing expenditure incurred by the assessee in relation to the tax exempt incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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