TMI Blog2017 (12) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... late the disallowance as per rule 8D as per the guidelines given above in the case of Transport Corporation of India [2016 (11) TMI 245 - ITAT HYDERABAD] and calculate the disallowance of expenditure under rule 8D(2)(ii) & (iii) taking the average investment from which the exempt income is received. By calculating as per the above direction, in case, the disallowance arrived u/s 14A is less than the disallowance made by Assessee, the disallowance made by the assessee may be sustained. Accordingly, ground raised by the assessee is allowed for statistical purposes. - ITA No. 1110/Hyd/2017 And C.O. No. 22/Hyd/2017 - - - Dated:- 13-12-2017 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For The Revenue : Smt. S. Praveena For The Assessee : Shri A.V. Raghuram ORDER PER S. RIFAUR RAHMAN, AM: This appeal is filed by the Revenue against the order of CIT(A) - 1, Hyderabad dated 09/03/2017 relates to the AY 2013-14. The assessee also filed C.O. against the said order of the CIT(A). 2. Briefly the facts of the case are that the assessee company is a listed public limited company engaged in the business of providing infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and assumed the same to be towards payments made for SECC projects. The assessee submitted that during the year it had made an expenses of ₹ 66,12,186/- towards the amount paid for SECC project and the same was reflected under Business support charges in the profit and loss account. As the Individual payments were below the exemption limit for the purpose of TDS, hence TDS not made. Further, it was submitted that the assessee s accounts are Audited u/s. 44AB and the Auditors have also not qualified for non-compliance relating to TDS. 6. After considering the submissions of the assessee, the CIT(A) observed that there is a force in the submissions of the assessee and evidence submitted by assessee have details which show payment to individuals had been less than taxable limit. He further observed that the payments made to employees and the same were paid during the FY 2012-13. In view of the above observations and relying on the decision in the case of M/s Merilyn Shipping Transport, the CIT(A) deleted the addition made on this count. 7. Aggrieved by the order of CIT(A), the revenue is in appeal before us raising the following grounds of appeal: ( l)The Ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) has verified the salary register submitted by the assessee in the form of letter, however from the order, it is not clear whether it is verified thoroughly with the data sheets, programme sheets and agreements with the employees, if any. Ld. AR has confirmed that this information is available with the assessee to prove the genuineness of the transaction. Ld. CIT(A) deleted the addition relying on the case of Merilyn Shipping (supra). However, this decision was reversed by the Hon ble Supreme Court and further, this transaction needs verification at the AO level, accordingly, this issue is remitted to the file of the AO to verify the genuineness of the transaction and allow the same as per the provisions of law. Assessee may be given opportunity of being heard. Accordingly, grounds raised by the revenue on this are allowed for statistical purposes. C.O No. 22/Hyd/17 by assessee 11. In the C.O. the assessee has raised the following objections: 1. The order of the learned Commissioner of Income-tax (Appeals) is erroneous both in facts and law to the extent it is prejudicial to the assessee. 2. The learned CIT(A) having given a finding of fact that the sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny has earned dividend on shares amounting to ₹ 89,543/-. As the same is exempted under section 10(34), the company has claimed the exemption. Conservatively, though not required, company on its own, calculated the disallowance under section 14A read with rule 8D and accordingly disallowed a sum of Rs.l,66,096/- while computing the total income. 16. After considering the submissions of the assessee, the CIT(A) elaborately discussed the issue at length with various case law and held that the assessee has worked out disallowances of ₹ 1,66,096/- u/s 14A relating to direct expenditures of share transfer and payment to M/s Karvy Computer Share Pvt. Ltd. He further held that the AO has taken more judicious view by applying rule 8D in calculating the expenditure relating to this investment and approved the view of the AO that direct and indirect expenditure both should be disallowed u/s 14A. He, accordingly, upheld the action of the AO. 17. Aggrieved by the order of CIT(A), the assessee is in appeal before us. 18. Considered the rival submissions and perused the material facts on record. The assessee has not submitted any computation in support of disallowance u/s 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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