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M/s. White Water Mass Media Pvt. Ltd. Versus ACIT – 8 (3) , Mumbai

2014 (9) TMI 1110 - ITAT MUMBAI

Disallowance u/s 14A r.w.r. 8D - Held that:- A perusal of the profit and loss account of the assessee reveals that the assessee had a net positive interest income, under such circumstances, it cannot be said that the assessee had incurred interest expenditure for earning of exempt income. - For the remaining amount of expenditure on account of common administrative expenses is concerned, the disallowance of ₹ 8,61,509/- u/s 14A seems to be excessive, considering the taxable income of .....

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ce will be well served if the disallowance u/s 14A is restricted to 10% of the remaining/common administrative expenses of ₹ 16,60,983/-. - Decided partly in favour of assessee - ITA No.2963/M/2013 - Dated:- 17-9-2014 - SHRI R.C. SHARMA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER Assessee by : Shri Kirit J Sheth, A.R. Revenue by : Shri B. Yadagiri, D.R. O R D E R Per Sanjay Garg, Judicial Member: The present appeal has been filed by the assessee agitating the disallowance of & .....

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earn the above exempt income. He therefore computed the disallowance under section 14A in accordance with the provisions of rule 8D at ₹ 8,61,509/-. 3. In appeal before the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)], it was submitted that the assessee had earned major part of income from professional fees and incurred expenses for the same. Out of the total administrative expenses of ₹ 5,99,14,291/-, a sum of ₹ 5,82,53,311/- was incurred for e .....

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served that since the assessee had earned dividend income, so assessee might have incurred some expenses in respect of the same. He therefore upheld the disallowance made by the AO as per the provisions of rule 8D of the I.T. Rules. Aggrieved from the order of the ld. CIT(A), the assessee has preferred the present appeal before us. 4. The ld. A.R. of the assessee, before us, has submitted that the assessee during the relevant assessment year has earned interest income of ₹ 1,80,49,474/-. H .....

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the same should be apportioned in ratio of taxable income to exempt income. On the other hand, the ld. D.R. has relied upon the findings of the lower authorities. 5. We have considered the rival submissions of the ld. representatives of the parties. It may be observed that in the case of Godrej & Boyce Manufacturing Co. Ltd. 328 ITR 81, the Hon'ble Bombay High Court has held that under section 14A of the Income Tax Act, resort can be made to Rule 8D of the Income Tax Rules for determini .....

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AO must be arrived at on an objective basis. In a situation where the accounts of the assessee furnish an objective basis for the AO to arrive at a satisfaction in regard to the correctness of the claim of the assessee, there would be no warrant for taking recourse to the method prescribed by the rules. An objective satisfaction contemplates a notice to the assessee, an opportunity to the assessee to place on record all the relevant facts including his accounts and recording of reasons by the AO .....

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