TMI Blog2015 (12) TMI 1788X X X X Extracts X X X X X X X X Extracts X X X X ..... legal and professional fees, business support fees etc. On perusing the schedule L related to administrative expenses we find none of the accounts are prima facie directly identifiable as one meant for earning the exempt of income. Some of the expenses so claimed in the schedule related to other business expenses. Similar is the case with the other appeals under consideration as well.AO mechanically applied the provisions of Rule 8D(2)(iii) without examining the books of accounts of assessee and therefore, the addition is unsustainable in law. See CAPE TRADING P. LTD. VERSUS ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 29, MUMBAI [2015 (8) TMI 211 - ITAT MUMBAI] - Decided in favour of assessee - I.T.A. No.4088/Mum/2013, I.T.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly worded and informed that the facts are also identical with mutatis mutandis . Tracing the facts of the said case, the counsel demonstrated that the AO made disallowance u/s. 14A of the Act read with Rule 8D(2)(iii) on account of administrative expenses and applied the rate of 0.5% of the average value of investment. However, he ignored the fact that the expenses actually incurred for earning the dividend income is less than what is disallowed by the AO. The CIT(A) confirmed the order of AO, ignoring the facts of the case. 5. Under these circumstances, the matter was decided by the Tribunal in the said case on 11.02.2013, vide the discussion given in para 7 of the said order (supra) the appeal of the assessee was allowed. The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enses so claimed in the schedule related to other business expenses. Similar is the case with the other appeals under consideration as well. In such circumstances, we are of the view that the AO mechanically applied the provisions of Rule 8D(2)(iii) without examining the books of accounts of assessee and therefore, the addition is unsustainable in law. Thus, we are of the opinion that the discussion given by ITAT vide paragraph 9 of the order of the Tribunal in ITA No.3772/Mum/13 (supra) are considered relevant and significant. Accordingly the said paragraph 7 is extracted as below: From the details of the expenses, we find that the printing and stationery expenses and bank charges and commission are only two items which could have dire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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