TMI Blog2017 (9) TMI 1096X X X X Extracts X X X X X X X X Extracts X X X X ..... which in the present case is ₹ 2,50,000/-. - I.T.A. No.6561/Mum/2014 - - - Dated:- 6-9-2017 - SHRI D.T.GARASIA, JM AND SHRI RAJESH KUMAR, AM For The Appellant : Shri Deepak Tralshawala For The Respondent : Shri Purushottam Kumar ORDER PER RAJESH KUMAR, A. M: This is an appeal filed by the assessee against the order of ld.CIT(A)-1, Mumbai dated 28.8.2014 for the assessment year 2010-11 wherein the assessee has challenged the sustenance of disallowance of ₹ 34,59,553/- by the ld. CIT(A) as made by the AO under section 14A of the Income Tax Act, 1961 r.w.s.Rule 8D of the Income Tax Rules, 1961 and also the issue of disallowance u/s 40(a)(ia) of ₹ 606,650/- made on account of non-payment of TDS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge investments ₹ 33,20,941/- u/r 8D(2)(iii) by making assessment under section 143(3) at book profit of ₹ 7,08,40,966/-. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A). 3. Before the FAA, the ld.AR submitted that the disallowance of ₹ 34,59,553 was worked out under section 14A r.w.rule 8D without recording any satisfaction with reference to the books of account maintained by the assessee and hence the AO has violated the provisions of section 14A of the Actr.w.r.8D of the Rules. However, the ld.CIT(A) brushed the submissions of the assessee and dismissed the appeal of the assessee by observing and holding as under(4.1,4.1.1 CIT) : 4.1 I have considered the facts and circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, repairs and maintenance etc. The assessee has debited an amount of ₹ 1,38,612/- under the head 'Bank charges' and the same are directly attributable to the earning of dividend income and LTCG' - is valid and calls for application of Rule 8D. Section 14A Rule 8D is applicable for the assessment year under appeal which is a deeming provision and once the facts circumstances requiring its application are fulfilled, the disallowance has to be worked out under the very same fiction without splitting, and resorting to peace meal application. The AO has given specific instances of expenses attributable to earning exempt income. Therefore, the proposition of the appellant that no expenditure has been incurred for earning exem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the period of amendment by way of insertion of Rule 8D, and related to retrospective application of Sec.14A read with Rule 8D, which are not relevant for the year under appeal where the legal position is clarified as above and facts of the case as also noted by AO sustain the disallowance as made. In view of the above discussion, Ground no.1 is dismissed . Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us. 4. The ld.AR of the assessee submitted before us that the AO made the disallowance on the basis of presumptions and assumption and without recording any specific recording of satisfaction on the books maintained by the assessee. The ld. CIT(A) also by relying on the finding of the AO confirmed the actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Hon-ble Delhi High Court are reproduced below (20 of order) : 20. However, in the present case we need not refer to sub Rule (2) to Rule 8D of the Rules as conditions mentioned in sub Section (2) to Section 14A of the Act read with sub Rule (1) to Rule 8D of the Rules were not satisfied and the Assessing Officer erred in invoking sub Rule (2), without elucidating and explaining why the voluntary disallowance made by the assessee was unreasonable and unsatisfactory. We do not find any such satisfaction recorded in the present case by the Assessing Officer, before he invoked sub Rule (2) to Rule 8D of the Rules and made the re-computation. Therefore, the respondent assessee would succeed and the appeal should be dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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