TMI Blog2019 (5) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 67,35,894/- as has been calculated hereinabove. A.R. during the course of hearing prayed before the Bench to apply a percentage of 2% to 5% of the said expenses, however, we are not convinced with the arguments of A.R. on this issue. 10% of the said expenses would be reasonable disallowance u/s 14A r.w.r. 8D(2)(iii) in this case. Accordingly, a sum of ₹ 6,73,589/- is sustained by reversing the order of Ld. CIT(A) and AO is directed to delete the remaining disallowance. Appeal of the assessee is partly allowed. - ITA No.275/M/2018 - - - Dated:- 15-5-2019 - Shri Rajesh Kumar, Accountant Member And Shri Ram Lal Negi, Judicial Member For the Assessee : Shri Neelkanth Khandelwal, A.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, interest on car loan and depreciation and amortization expenses. However, the AO did not accept the contentions of the assessee and calculated the disallowance at ₹ 65,87,383/- and after allowing the deduction of suo-moto disallowance of ₹ 64,583/- made a net addition of ₹ 65,22,800/-. 4. In the appellate proceedings, the Ld. CIT(A) partly allowed the appeal of the assessee by working out the disallowance of ₹ 53,95,230/- by taking the proportionate expenses in the ratio of exempt income to total exempt income by observing and holding as under: 4. I have considered the submission made by the appellant and the reasons recorded by the AO. So far as the first ground of appeal is concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has already disallowed amount of ₹ 64,583/- in the return of income, the disallowance to be made u/s 14A works out to ₹ 53,95,230/-. The AO is directed to restrict the disallowance accordingly. Accordingly, the appeal of the appellant is partly allowed. 5. We have heard the rival submissions of both the parties and perused the material on record. We observe that total expenses as claimed in the profit loss account were ₹ 1,56,74,085/- and after excluding the expenses which were incurred and considered separately and also the suo-moto disallowances out of these expenses , the net expenses comes to ₹ 67,35,894/- as per detail as under: Total Expenses as per Profit Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,20,000/- Added while computing the total income. Claim in return of income as an Expense 67,35,894/- 6. We observe that out of these expenses the majority of the expenses were not relating to the earning of exempt income as the expenses were incurred for the purpose of running of business of the assessee. Therefore, we are not in agreement with the conclusion drawn by the Ld. CIT(A) of attributing the expenses to earning of exempt income in the ratio of exempt income to total income. We, further, note that the co-ordinate bench of the Tribunal in ITA No.5608/M/2015 A.Y. 2011-12 vide o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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