TMI Blog2019 (4) TMI 214X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 86,893/-; and expenses relating to property rented out by the assessee at ₹ 50,872/-, have no connection with the exempt income and hence cannot be considered for disallowance u/s 14A. The remaining item of expense in this list is a sum of ₹ 83,240/-, which is payment of professional fees, that relates to income-tax filing return common both to the taxable and exempt income. The same is therefore, liable to be considered as common expense and not exclusively for taxable income. At this stage, it is pertinent to note that even under rule 8D, the disallowance u/s.14A cannot exceed the total amount of expenses incurred by the assessee either exclusively for exempt income or jointly for exempt and taxable income. In this backdrop of the facts, we order to restrict the disallowance to ₹ 1,21,842/- (Rs.38,602 + ₹ 83,240). The issue is, therefore, partly allowed. Computation of interest u/s.234A and 234B - date-wise payments of self-assessment tax made by the assessee, both before and after the due date u/s 139(1) - HELD THAT:- Once the amount of self assessment tax was paid, the Revenue could not be considered as deprived of the amount of tax due to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 89/- in accordance with rule 8D(2)(iii), the ld. CIT(A) not only confirmed the addition but also enhanced it by ₹ 38,602/- on the basis of submissions made by the assessee, which have been captured at page 22 of the impugned order. The assessee is aggrieved by such sustenance of addition as well as its enhancement. 4. We have heard both the sides and gone through the relevant material on record. It is seen from the assessee s Profit and loss account, whose copy is available at page 2 of the paper book, that he incurred total Indirect expenses of ₹ 20,12,169/- whose detail has been given at page 4 of the paper book. Out of such total indirect expenses, the assessee paid interest to Corporation Bank as well as Kotak Mahindra Bank to the tune of ₹ 1,39,445/- and ₹ 10,61,618/- respectively, thereby leaving other expenses at ₹ 8,11,107/-. The assessee submitted a chart before the ld. CIT(A) contending that out of such remaining expenses, a sum of ₹ 7,72,505/- was exclusively incurred towards expenses in respect of taxable income thereby leaving common expenses, incurred both for taxable and non-taxable income, at ₹ 38,602/-. The ld. CIT(A) hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income. Similar to his action for the preceding year, the ld. CIT(A) not only sustained the disallowance as made by the AO but also enhanced the disallowance u/s 14A by such an amount of ₹ 13,297/-. The assessee is aggrieved by the confirmation as well as enhancement of the addition. 8. Having heard both the sides and gone through the relevant material on record, we find that this issue is similar to that of A.Y. 2010-11 which has been determined hereinabove. It is observed that out of the expenses claimed to have been incurred by the assessee exclusively for taxable income, there is an item of common expense, which is Professional fee of ₹ 58,521/-. Following our above decision for earlier year, we direct to delete the enhancement of disallowance made by the ld. CIT(A). At the same time, the disallowance is restricted to common expenses incurred by the assessee at ₹ 71,818 (namely ₹ 13,297 + ₹ 58,521). This issue is partly decided in favour of the assessee. 9. The only other issue which survives in the instant appeal is against the computation of interest u/s.234A and 234B of the Act. The fact apropos this issue are that the assessee admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Circular No.2/2015, dated 10-02-2015 providing that no interest u/s.234A of the Act is chargeable on the amount of self-assessment tax paid by the assessee before the due date of filing of return of income . It is this circular which has been followed by the ld. CIT(A) in restoring the matter to the AO for making a fresh calculation of disallowance of interest u/s.234A. 11. The case of the assessee is that though the impugned order provides for exclusion of self assessment tax paid before the due date of the return of income, but there is no such direction for reducing the amount of self-assessment tax paid by the assessee after the due date but before the actual filing of return. It is the case of the assessee that similar direction ought to have been given for such later interest payment as well. We find force in the argument of the ld. AR. It is a settled legal position that payment of interest u/s.234A is a compensation to the Revenue for deprivation of the amount of tax due, for the period it is not paid. The Hon ble Supreme Court in Pranoy Roy (supra) dealt with a situation in which the amount of self-assessment tax was paid before the due date u/s. 139(1). There ..... X X X X Extracts X X X X X X X X Extracts X X X X
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