TMI Blog2016 (1) TMI 1236X X X X Extracts X X X X X X X X Extracts X X X X ..... facts that it has failed to attribute whole of the expenditure amounting g to ₹ 28,21,000/- qua earning of the remaining miniscule taxable income. This has made the CIT(A) to invoke the impugned proportionate disallowance in view of these facts and circumstances. The assessee has relied upon a catena of case of law in support of its contentions opposing proportionate disallowance. None of the said cases seem to involve an investment company alike the assessee. We hold in other words that the assessee company incurs its expenditure in making share investments only keeping in mind its business and exempt income of more than 90% of the gross receipts. We find no merits in assessee’s sole substantive raised in both impugned assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The assessee is an investment company. The state government holds the assessee-entity making share investments in various companies. Its gross receipts in the these two impugned assessment years are of ₹ 12,08,61,000/- and ₹ 40,54,52,000/-. The same comprised of exempt dividend income of ₹ 11,26,09,983/- and ₹ 13,59,06,057/-. Relevant expenditure claimed in the two impugned assessment year turns out to be that of ₹ 28,21,000/- and ₹ 34,87,000/-; respectively. The assessee did not allocate any expenditure in relation to its above stated exempt income. The Assessing Officer invoked rule 8D to compute section 14A disallowances of ₹ 2,25,20,176/- and ₹ 2,50,85,863/- in the two impugned asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble income. The Revenue supports this disallowance in both assessment years. 7. We have heard rival contentions. There is no dispute between parties about facts and figures narrated hereinabove. The CIT(A) has invoked proportionate disallowance qua assessee s dividend incomes earned in the two impugned assessment years. There is no dispute that the assessee is already an investment company only deriving exempt income to the tune of almost 90% of the gross receipts in former assessment year. We observe in these facts that it has failed to attribute whole of the expenditure amounting g to ₹ 28,21,000/- qua earning of the remaining miniscule taxable income. This has made the CIT(A) to invoke the impugned proportionate disallowance in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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