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Shanti Bhushan, (Senior Advocate) Versus ACIT, Circle 63 (1) , New Delhi

2017 (9) TMI 379 - ITAT DELHI

Disallowance made u/s. 14A - expenses related to earning of income on which tax is not payable in the eyes of law - Held that:- Disallowance out of expenses incurred by the assessee in the course of his practice as a Senior Advocate is not sustainable as at no stage it has been said that the authorities found any dissatisfaction as regards the correctness of the claim made by the assessee. In view of above, no disallowance under section 14A is sustainable in the eyes of law. We further find cons .....

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PER H.S. SIDHU : JM Assessee has filed this Appeal against the impugned Order dated 01.7.2015 passed by the Ld. CIT(A)-20, New Delhi relevant to assessment year 2011-12 on the following grounds:- 1. That on the facts and in the circumstances of the case the Ld. CIT(A) erred in confirming the disallowance u/s. 14A of ₹ 5,72,868/- as against ₹ 1,25,963/- computed by the assessee towards expenses related to earning of income on which tax is not payable. 2. That the Ld. CIT(A) erred in .....

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respect of ₹ 12596/- already added in the computation of income as disallowable expenses u/s. 14A of the Act and further erred in holding that the expenditure was a personal expenses of the assessee. 4. That the orders of the Ld. Authorities below being contrary the facts and circumstance of the case and in law the appeal be allowed. 2. The brief facts of the case are that Assessee had filed the return declaring income of ₹ 15,84,70,570/- on 30.9.2011. The case was processed u/s. 143 .....

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ear under consideration, the assessee derived income from salary (Pension), house property, profession, and capigal gain. The reason of scrutiny selection under CASS was to examine the source of cash deposits in saving bank account as per AIR information and sale consideration, cost claimed while computing LTCG before deduction u/s. 54B, C, D, G, GA. The Counsel of the assessee was asked to explain the same and he vide submission dated 30.1.2014 stated that the cash deposits in the saving bank a .....

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view of the fact that the insertion of section 14A was curative and declaratory. The assessee has not provided any separate account for earning of exempt income. AO further observed that the assessee has made very heavy investments for earning exempt income throughout the year. Assessee also managing such a large portfolio entail expenses right from diversion of manpower / staff for indulging in investment activities to various activities like visiting banks, use of vehicle and telephone, use of .....

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the earning of exempt income and added back to the income of the assessee and accordingly, assessed the income of the assessee at ₹ 15,90,43,440/- and completed the assessment u/s. 143(3) of the I.T. Act, 1961 dated 12.3.2014. 3. Aggrieved with the assessment order dated 12.3.2014, the assessee preferred an appeal before the Ld. CIT(A), who vide impugned order dated 01.7.2015 has partly allowed the appeal. 4. Against the impugned order dated 01.7.2015, assessee has filed the Appeal before .....

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isfaction as regards the correctness of the claim made by the assessee. He requested that the addition in dispute may be deleted and the Appeal of the Assessee may be allowed. He further stated that the ITAT, G Bench, New Delhi in assessee s own case for the assessment year 2008-09 has allowed the Appeal of the assessee on the similar issue vide ITA No. 949/Del/2012 (AY 2008-09) dated 14.12.2016, hence, the issue involved in the present appeal is squarely covered by the aforesaid decision. For r .....

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emo in this behalf was issued at the time of filing of the appeal by the Registry. We also find that assessee s counsel vide his application dated 02.9.2015 has requested for condonation of delay of one day stating therein that the order of the Ld. CIT(A) in this case was received on 03.7.2015 and the last date of filing the appeal was 01.9.2015. However, the assessee was out of station and returned to Delhi only on the evening of 1st September, 2015 and therefore, he could not sign the appeal w .....

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he assessee as expenses related to earning of income on which tax is not payable in the eyes of law. We further find that disallowance out of expenses incurred by the assessee in the course of his practice as a Senior Advocate is not sustainable as at no stage it has been said that the authorities found any dissatisfaction as regards the correctness of the claim made by the assessee. In view of above, no disallowance under section 14A is sustainable in the eyes of law. We further find considerab .....

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#8377; 50,400/- computed by the assessee as expenses related to earning of income on which tax is not payable in the eyes of law. We further find that disallowance out of expenses incurred by the assessee in the course of his practice as a Senior Advocate is not sustainable as at no stage it has been said that the authorities found any dissatisfaction as regards the correctness of the claim made by the assessee. In view of above, no disallowance under section 14A is sustainable in the eyes of la .....

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