TMI Blog2017 (9) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Rules is directed to be deleted and accordingly, the grounds raised by the assessee stand allowed. - I.T.A. No. 6067/DEL/2015 - - - Dated:- 13-9-2017 - SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : None For The Department : S h . Shravan Gotru, Sr. DR ORDER PER H. S. SIDHU : JM Assessee has filed this Appeal against the impugned Order dated 01.9.2015 passed by the Ld. CIT(A)-XXVIII, New Delhi relevant to assessment year 2011-12 on the following grounds:- 1. That the learned CIT (Appeals) erred in not holding that the assessment proceedings being under CASS, the scope of enquiry should have been limited by the AO to such notice and any other variat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee that no such expenditure was incurred to warrant any addition u/s 14A of the Act. 6. That the orders of the learned authorities below being contrary the facts and circumstances the case and in law the appeal be allowed. 2. The brief facts of the case are that Assessee, Justice (Retd.) M.L. Varma, after having retired from the High Court of Delhi, is presently carrying on his legal practice in the Hon ble Supreme Court of India. Besides this, he has also adjudicates on arbitration proceedings or by way of appearances in Hon ble High Courts outside Delhi. For the relevant assessment year the assessee had filed a return of total income of ₹ 2,71,92,720/- which has been assessed at ₹ 2,72,72,90/- vide ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee towards expenses claimed as related to earning of income on which tax is not payable. In our view, the disallowance is contrary to the law laid down by Hon ble Delhi High Court in case of Maxopp Investment v. CIT (reported in 203 Taxman 364(Delhi), and hence, not sustainable, because the AO had failed to verify the veracity of the assessee's statement that it had not claimed any expense in the earning of the tax free income and also the disallowance of ₹ 80,182 is purely based on presumption that the assessee incurred so much of amount from the expense claimed totally ignoring the positive stand and explanation of the assessee that no such expenditure was incurred to warrant any addition u/s 14A of the Act. In this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenditure incurred and the exempt income, A 'proximate cause' connotes a relationship between the expense and the exempt income (Walfort).... . (ii) The Delhi High Court in the case of Maxopp Investment held as under: 26. It was contended by the learned counsel for the assessees that the words expenditure incurred as appearing in section 14A(1) clearly mean that there must be actual expenditure. Of course, the actual expenditure must be for earning the exempt income. We have already pointed out above, that we do not subscribe to the narrow interpretation sought to given to the words in relation to which the learned counsel for the assessees are espousing. Thus, we will have to consider the argument of the assses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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