TMI Blog2019 (7) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the course of hearing also pointed out that if the calculation is being made on the basis of 0.5% of average value of the investment, which has yielded dividend, then total expenditure could be worked at ₹ 548/- only. Therefore, considering the details submitted by the assessee as well as the fact that on similar investment no expenditure was disallowed in earlier years or in the subsequent year, we are of the view that no disallowance is required u/s 14A in the present year also. This ground of appeal is allowed. - ITA No.2071/Ahd/2017 - - - Dated:- 3-7-2019 - Shri Rajpal Yadav, Judicial Member And Shri Pradipkumar Kedia, Accountant Member For the Assessee : Shri P.F. Jain, AR For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on made by the AO reads as under: 5.3 I have duly considered the above reply of the assessee. The main emphasis of the assessee is on the fact that he has invested surplus fund and no borrowed fund was utilized for the investment. Here it will be better to refer to the balance sheet of the assessee which shows that the assessee has total funds of ₹ 6,48,82,007/- as on 31.03.2013 which is its own capital. Further, total investment as on 31.03.2013 has been shown at ₹ 8,01,09,664/- against an amount of ₹ 4,25,85,391 /-. The two figures i.e. the funds available with the assessee and the investment made themselves speaks volumes about the availability of surplus funds with the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssesses for earning income which does not form part of total income under the Act shall not be allowable expenditure. Disallowance required to be made u/s 14A read with Rule 8D is also examined in view of following case laws: CIT vs. Popular Vehicle Service Ltd. 325 ITR 0523 (2010 Kerala) Pradeep Kar vs. Asstt. Commissioner of Income Tax 319 ITR 0416 (2009) Karnataka. 5.4 Provisions of Rule 8D specifically make a mention, in respect of formula given for computing indirect expenses attributable to income claimed as exempt under section 14A of the Act. Therefore, following the provisions laid down, a disallowance on account of expenses is computed in the following man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to administrative expenses is required to be made. The ld.counsel for the assessee while impugning the order of the ld.revenue authorities took us through bifurcation of alleged dividend of mutual fund which reads as under: Dividend on Mutual Fund: 1. Dividend on SBI SDFS: 2,03,248 2. Dividend on SBI Short Horizon 24,011 Fund Ultra Short Term Fund: 3. Divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to observe that sub-section (2) of section 14A contemplates that the AO has to record a finding as to how accounting entries maintained by the assessee showing interest expenditure are not acceptable. He has to record his satisfaction before applying computation under Rule 8D. The assessee has demonstrated that it has not incurred any expenditure for making investment in mutual fund. These are old investments though certain changes are there, but for that purpose it is not required to incur expenditure as computed by the AO. 7. The ld.AR during the course of hearing also pointed out that if the calculation is being made on the basis of 0.5% of average value of the investment, which has yielded dividend, then total expendit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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