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TMI Blog2021 (8) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The Ld AR submitted that Ld. AO did not recorded objective satisfaction before applying Rule 8D and therefore, the disallowance would not be sustainable in law as per settled legal position. The Ld. AR also advanced without prejudice argument that disallowance should have been computed only with respect to those investments which have yielded exempt income during the year. The assessee has also raised an additional ground of appeal to submit that the additional disallowance as made by Ld. AO while computing Book Profit u/s 115JB should also be deleted. Since the additional ground arises from the main ground, the same is admitted. The Ld. DR, on the other hand, submitted that the disallowance has been worked as per the statutory mandate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance u/s 14A. There is no change in assessee's business. The methodology has been accepted in appellate order for AY 2012-13. The assessee has computed the disallowance in a scientific manner which is evident from the following table: - No. Particulars Amount (Rs.) % Disallowance (Rs.) 1. Vidya Puthran (employee) 2,42,000 100% 2,42,000 2. Tarun Chaturvedi (employee) 9,25,000 15% 1,38,750 3. Telephone 1,45,431 15% 21,815 4. Postage & Telegram 1,05,658 15% 15,849 5. Electricity Charges 94,764 15% 14,215 6. Securities Transaction Charges 66,406 100% 66,406 7. Rent for Table space (notional) 90,000 100% 90,000 8. Demat Charges 9,541 15% 1,431 Total 5,90,465 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of a satisfaction in the Assessing Officer that having regard to the accounts of the assessee, as placed before him, it is not possible to generate the requisite satisfaction with regard to the correctness of the claim of the assessee. It is only thereafter that the provisions of Section 14A(2) and (3) read with Rule 8D of the Rules or a best judgment determination, as earlier prevailing, would become applicable. Further Hon'ble Apex Court in Maxopp Investment Limited V/s CIT (91 Taxmann.com 154) at para-32 observed that it is that expenditure alone which has been incurred in relation to the income which is not includible in total income, is to be disallowed. If expenditure has no casual connection with the exempt income, such expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X
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