TMI Blog2018 (6) TMI 1538X X X X Extracts X X X X X X X X Extracts X X X X ..... sment years thereby affording one more opportunity to the assessee to work out the actual expenditure incurred by it towards the investment that earn exempt income and disallow the same. We further hereby direct the Ld.AO to verify the computation submitted by the assessee for both the assessment years and thereafter decide the matter in accordance with law and merit. Addition on account of unsecured loans and unexplained sundry creditors - assessee could not discharge its onus with respect to the genuineness of the loan and the genuineness of the sundry creditors - Held that:- Though we do not appreciate the lethargic attitude of the assessee in not furnishing the requisite documents and records before the Ld.Revenue Authorities at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disallowance made by the Ld.AO by invoking the provisions of Section 14A r.w.r. 8D of the Rules to the extent of exempt income earned by the assessee. 3. Assessee s Cross Objection:- A) Assessment year 2011-12:- The assessee has raised five grounds in its cross objection for the assessment year 2011-12 however the crux of the issue is that the Ld.CIT(A) has erred in partly confirming the addition made by the Ld.AO by invoking the provisions of Section 14A of the Act. B) Assessment year 2012-13:- The assessee has raised several grounds in its cross objection for the assessment year 2012-13 and they are briefly stated herein below:- (i) The Ld.CIT(A) has erred in partly confirming the addition made by the Ld.AO by invokin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4A of the Act:- During the course of scrutiny assessment proceedings in both the assessment years it was observed by the LD.AO that the assessee had made investment in shares earning dividend income which is exempt from tax. For both the assessment years, the assessee did not compute the disallowance of expenditure incurred for earning exempt income. Therefore the Ld.AO invoked the provisions of Section 14A r.w.r. 8D of the Rules and worked out the disallowance for the assessment year 2011-12 at ₹ 4,55,29.543/- and ₹ 7,11,99,083/- for the assessment year 2012-13. On appeal the Ld.CIT(A) was also of the same view that of the Ld.AO, for having invoked the provisions of Section 14A r.w.r.8D of the Rules, however directed the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Therefore we are of the view that the Ld.AO was right in his realm to invoke the provisions of Section 14A r.w.r.8D of the Rules. Further it is pertinent to mention that there is no correlation between the dividend income earned by the assessee and the expenditure incurred by the assessee towards investment that earns exempt income. For example:- during a particular year the assessee would not have earned any dividend income though it has made heavy investments during the previous year or the earlier years, but the assessee is bound to incur cost for acquiring / maintaining /dis-investing such investments. Hence it cannot be inferred that the dividend income would be directly proportional to the expenditure incurred on the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions herein above in the Revenue s appeal, the ground raised by the assessee in its cross objection for the assessment year 2012-13 also does not survive. 8. Ground Nos.3 (B) (ii) to (v) :- The Ld.CIT(A) had confirmed the order of the Ld.AO with respect to addition on account of unsecured loans and unexplained sundry creditors because the assessee could not discharge its onus with respect to the genuineness of the loan and the genuineness of the sundry creditors. Similarly the Ld.CIT(A) had confirmed the order of the Ld.AO with respect to the addition made on account of administrative expenses because the assessee could not substantiate the same with necessary supporting bills and vouchers. Further the Ld.CIT(A) had confirmed the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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