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TMI Blog2014 (10) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... . Billaiya (Accountant Member) This appeal by the assessee is preferred against the order of the CIT(A)-3, Mumbai dated 23.06.2011, pertaining to Assessment Year (A.Y.) 2008-09. 2. The sum and substance of the grievance of the assessee is twofold. Firstly, the ld. CIT(A) erred in confirming the addition of Rs. 5,03,361/- made u/s.14A of the Act and secondly, the ld. CIT(A) erred in confirming th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be attributed towards exempt income. The A.O. went on to compute the disallowance by applying the formula given in Rule 8D and worked out the disallowance being 0.5% of the average investment at Rs. 5,03,361/-. Proceeding further, the A.O. noticed that the assessee has incurred various expenses in cash. The assessee was asked to submit the details of cash expenses. The assessee filed the deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee stated that no expenditure was incurred for earning the exempt income. Therefore, the disallowance made u/s.14A r/w Rule 8D is unwarranted. The Departmental Representative (DR) supported the findings of the lower authorities. We have gone though the order of the authorities below. It is the settled proposition of law that the application of Rule 8D is mandatory on and from A.Y. 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their report that amount of Rs. 9.18 lacs have been paid in cash in violation of the provisions of section 40A(3) of the Act. Although the same was claimed to be allowable as per Rule 6DD, however, no details have been furnished, neither before the Revenue authorities nor before us. Therefore, the expenditure of Rs. 9.18 lacs are clearly disallowable, as per the qualification of the Auditors. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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