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TMI Blog2013 (3) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... ed is 2008-09 and the impugned order was passed by the ld. CIT(Appeals) on 2nd August, 2011. 2. The relevant material facts are like this. The assessee is an individual and derives income from business capital gains and other sources. During the course of the assessment proceedings, the Assessing Officer noted that the assessee has earned exempt dividend income of ₹ 7,87,452/-, and that the assessee has not offered any disallowance under section 14A read with Rule 8D. It was also noted that during the relevant assessment year, the assessee has shown interest payment of ₹ 66,89,419/-. It was in this backdrop that the assessee was asked to compute the disallowance under section 14A read with Rule 8D. The computation given at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in shares and that the computation on which the Assessing Officer as relied was simply submitted in response to the requisition made by the Assessing Officer. The assessee further pointed out that the investment in shares was made by the appellant from own surplus fund and disallowance of interest was, therefore, not justified. Ld. CIT(Appeals), however, was not persuaded the arguments in his order. He simply rejected the submissions by observing as follows :- "5. I have perused the assessment order and considered the submissions made on behalf of the appellant. I do not find merit in the submissions. I find from the assessment order that the appellant has himself submitted the calculation for disallowance to be made u/s. 14A in cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, no disallowance can be made under section 14A on the facts of the case. 5. Shri K.N. Jana, ld. Sr. D.R. objects to the submissions of the assessee. He submits that the assessee on his own had offered disallowance before the Assessing Officer and, therefore, it is not open to the assessee to retract from the said stand and contended that no disallowance was warranted at all. Our attention was invited to page 2 of the assessment order, wherein the computation was given by the assessee was reproduced. Our attention is further invited to the observations made by the ld. CIT(Appeals), wherein it is stated that once the assessee has offered the disallowance under section 14A read with Rule 8D, it cannot be open to contend otherwise. Shri Jan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows :- "17. The question of estoppel because of option exercised with eyes open to the subsequent modification cannot be sustained. What is not otherwise taxable cannot become taxable because of admission of the assessee. Nor there can be any waiver of the right otherwise admissible to the assessee in las. The chargeability is not dependent on the admission of or waiver by the assessee. Chargeability is dependent on the charging section, which needs to be strictly construed. Referring to the decision in CIT -vs.- Bhaskar Mitter (1994) 73 Taxman 437 (Cal) at p. 442 (para 8), we had occasion to so hold in the decision in Mayanak Poddar (HUF) vs. WTO, IT Appeal No. 84 of 1999, disposed of on 24th Feb.,2003 (reported at (2003) 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concluded as follows :- "4. As learned CIT(A) has rightly observed, once there is no net interest expenditure, as is the case before us- upon setting off interest credited to profit and loss account, no part of interest debited can be disallowed as attributable to earning tax free dividend. The CIT(A) was thus quite justified in deleting the interest disallowance. We have also noted that entire expenses incurred by the assessee have been offered for disallowance, and once that happen, nothing remains for further disallowance u/s 14A. The disallowance under section 14A can come into play only out of expenses claimed for deduction and expenses have been claimed for deduction, there cannot be any disallowance either. The conclusions arr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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