9911796707
Advanced Search 
TMI Blog2016 (8) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(A) has erred in law while confirming the action of the Ld. Assessing Officer of applying Rule 8D read with Section 14A of the Income Tax Act, 1961 where no exempt income has been earned or shown by the assessee during the Assessment year 2009-10 and as such the Assessment order passed under section 143(3) is bad in law and may please be quashed. 2. That the Ld. CIT(A) has erred in facts and law while confirming the addition of Rs.17,36,661/- made by the Ld. Assessing Officer u/s 14A of the Income Tax Act, 1961 read with Rule 8D of the Income Tax Rules, 1962 where no exempt income has been earned during the year under consideration. Thus, the addition so confirmed by the Ld. CIT (A) is bad in law and may please be deleted. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules') be not made, to which assessee filed reply. Finding the reply filed by the assessee not tenable, AO invoked the provisions contained u/s 14A read with Rule 8D and calculated the expenditure for earning dividend income as under :- "(i) The amount of expenditure directly relating to income which does not form part of total income - Nil. (ii) In a case where the assessee has incurred expenditure by way of interest during the previous year which is not directly attributable to any particular income of receipt an amount : A X B/C A = Interest Rs.20,14,787/- B = Average of value of investment Rs.3,13,50,000/- C = Average of the total assets Rs.3,99,798,186/- Rs.20,14,787 x Rs.3,13,50,000 / s.3,99,79,186/- = Rs.15,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the facts and circumstances of the case and the contentions raised by the parties of the appeal, the sole question arises for determination in this case is :- "as to whether AO/CIT (A) have erred in making / confirming addition of Rs.17,36,661/- by invoking the provisions contained under section 14A read with Rule 8D?" 7. Before invoking provisions contained under Rule 8D(2)(iii), the AO has not recorded his dis-satisfaction of the correctness of the claim of expenditure made by the assessee nor AO came to the conclusions that, "the claim of the assessee that no expenditure has been incurred" is incorrect. Assessee has come up with categoric plea that no exempt income has been earned during the year under assessment nor the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s come up with categoric plea that he has made the investment after withdrawal from CC account the complete detail thereof was already with the revenue authorities, the CIT (A) was not empowered to reject the contention without calling report form AO or from the Bank itself or without verifying the facts that the investment has not been made form surplus funds. Rather the CIT (A) proceeded on the premise that, "any income whether exempt or not, can only be earned after incurring some expenditure", which is purely a guesswork on the basis of surmises and not permissible under law. More so, in the face of the fact that audited balance sheet and books of account have not been disputed by the revenue, the ground taken by the CIT (A) for affirmi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
