TMI Blog2017 (7) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... e is stated to have been incurred, the assessing authority has to apply Rule 8D. As the statutory presumption substitutes the requirement of factual evidence, the question of enquiry does not arise. Therefore, we are unable to agree with the argument of the learned A.R. - Appeal of the assessee is dismissed. - I.T.A.No.3280/Mds./2016 - - - Dated:- 3-4-2017 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER, AND Shri Duvvuru RL Reddy, JUDICIAL MEMBER For The Appellant : M.Karunakaran, Advocate For The Respondent : Mr.Durai Pandian, JCIT, Departmental Representative ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER This appeal of the assessee is directed against the order of the Commissioner of Income-tax (Appeals)-11, Chen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion when there is no expenditure incurred that cannot be any disallowance under Rule 8D(2)(iii). Further, he placed reliance on the decision of co-ordinate Bench of Mumbai Tribunal in the case of Justice Sam P. Bharucha Vs. ACIT in ITA No.3889/Mum/2011 dated 25th July 2012 wherein held that:- 5.1 The expenditure incurred in relation to the income which does not form part of total income has to be disallowed. However, it should be proximate relationship between the expenditure and the income, which does not form part of total income. Once such proximity relationships exist, the disallowance is to be effected. In case the assessee had claimed that ho expenditure has been incurred for earning the exempt income, it was for the assessing off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer has not pointed out that certain expenditure is not incurred for earning the professional income; but are incurred in relation to dividend income or such expenditure is incurred for inseparable and indivisible activities comprising professional as well as the activities on which is exempt income has been earned by the assessee, then in the absence of any such instance of expenditure, finding of Assessing Officer or any material to show that the expenditure incurred and claimed by the assessee against the taxable income has any relation for earning the exempt income, the provisions of section 14A cannot be applied. 5.3 In the case of silicone, permissible Lal versus ACIT supra this tribunal has considered and decided an identi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aside and the additions so made by the A.O. in the computation of business income is deleted. Ground is considered allowed. 5. The ld.D.R relied on the order of lower authorities. 6. We considered the arguments of both the sides in detail. Sec.14A(1) declares the law that the expenditure incurred by the assessee in relation to the income which does not form part of the total income under the Act shall not be allowed as a deduction in computing the taxable income of the assessee. Sec.14A(2) provides for determining the quantum of such expenditure which shall not be allowed as a deduction. That is the machinery provision as far as sec.14A is concerned. In that provision, it has been provided that if the Assessing Officer is not sati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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