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2016 (7) TMI 1128

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..... cer under section 14A of the IT Act by application of Rule 8D of the IT Rules is directed to be deleted. - Decided in favour of assessee. - ITA No. 6204/Del/2014, ITA No. 6205/Del/2014 - - - Dated:- 14-6-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER For The Assessee : Sh. KG Somani, CA For The Department : Sh. KK Jaiswal, Sr. DR ORDER These appeals filed by the separate assessees against the respective orders of Ld. CIT(A)-XXV both dated 10.9.2014 for the assessment year 2010-11. Since the issue involved in these appeals are common and identical, hence, were heard together and are being disposed of by this common order for the sake of convenience, by dealing with ITA No. 6205/Del/2014(AY 2010-11). 2. The grounds raised in .....

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..... the AO that inputs from the departmental system revealed that the assessee has undertaken the transactions amounting to ₹ 47,88,715/- in terms of investment in mutual funds etc. Notice u/s 148 of the IT Act,1961 was issued on 19.06.2012 after recording the reasons that income has escaped assessment within the meaning of section 147 of the IT act,1961 in the case of the assessee the assessment year 2010-11 and duly served upon the assessee. After providing a reasonable opportunity to the assessee, notice s u/s 142(1)/143(2) of IT Act, 1961 were issued on 2.11.2012, which were duly served upon the assessessee. In compliance to the above referred notices Ld. Authorised Representative of the Assesee appeared from time to time and filed t .....

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..... on basis under section 14A of the I.T. Act. In this connection, the legal position with regard to the applicability of Rule 8D of the IT Rules and also the provision of section 14A of the IT Act is now well crystallized by the later decisions of the Supreme Court In the case of Walfort Share Stock Brokers, which has been followed and applied by the Bombay High Court in the case of Godrej Boyce and the Jurisdictional High Court in the case of Maxopp Investment. Reference may be made to certain observations of the Bombay High Court and the Delhi High Court in the said judgments which are as under: (i) The Bombay High Court in the case of Godrej Boyce has held as under: ..... In order to determine the quantum of the disallowance. the .....

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..... ave to consider the argument of the asssessees in respect of the expression expenditure incurred in the context of the ITA 687/09 Ors Page 25 of 38 expenditure being in connection with or pertaining to income which does not form part of the total income under the said Act. 28. It was contended that unless and until there was actual expenditure for earning the exempted income, there could not be any disallowance under section 14A. While we agree that the expression expenditure incurred refers to actual expenditure and not to some imagined expenditure we would like to make it clear that the 'actual' expenditure that is in contemplation under section 14A(1) of the said Act is the 'actual' expenditure in relation to or .....

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