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TMI Blog2014 (12) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... and submissions thereof. The facts of the case as per assessment order are that the assessee had claimed TDS amounting to Rs. 4,236/- against which the interest income of Rs. 23,170/- has been shown on receipt basis. The AO, therefore, gave credit for the TDS pertaining to the income of Rs. 23,170/- and disallowed TDS credit for the balance amount of Rs. 1,909/-. The appellant has claimed that the TDS credit of the entire amount i.e. Rs. 4,236/- should be allowed even though income pertaining to the TDS has not been reflected in the relevant assessment year. 4.2 The disallowance of TDS credit made by the Assessing Officer is in accordance with the provisions of section 199 read with Rule 37BA(3) as per which (i) Credit for tax deducted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of merit and thus rejected. 5. Ground No. 2 relates to disallowance of Rs. 46,953/- out of electricity expenses. The assessee claimed expenditure on account of electricity of Rs. 52,170/- pertaining to his residence, which was disallowed as personal expenditure. The ld CIT(A) restricted the disallowance to 90% of the expenditure i.e. Rs. 46,953/-, the remaining 10% was allowed. The ld CIT(A) has held as under:- "5.1 I have carefully considered the assessment order and submissions thereof. The facts of the case as per assessment order are that the Assessing Officer disallowed the claim of the electricity expenses pertaining to the residence of the assessee at Greater Kailash, New Delhi, claimed as Professional Expenses, on the basis that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,15,230/- out of client development expenses of Rs. 11,52,302/-. 8. The AO and the ld CIT(A) have sustained disallowance as personal expenditure. Having considered the rival submission, we find the ld CIT(A) has examined the nature of the expenditure and the disallowance made vis-a-vis the evidence furnished. And he has come to the conclusion as under:- "6.1 I have carefully considered the assessment order and submissions thereof. The of the case as per assessment order are that the assessee had claimed Rs. 11,52,302/- as client development expenses. The Assessing Officer disallowed 10% of these expenses i.e. Rs. 1,15,230/- on the basis that some personal element cannot be ruled out as the expenses related to purchase of gifts, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment order shows that the Assessing Officer has expressed his satisfaction before taking recourse to rule 8. Further, on careful examination of the matter, I find that any income, whether exempt or not, can only be earned after incurring some expenditure. In the case of the appellant, such expenditure cannot be segregated in the accounts of the assessee and is clubbed with overall administrative/ financial and other expenses of the business as a whole. If any income is exempt from tax because it is not included in the total income by virtue of section 10 of the Income-tax Act, 1961, section 14A of the Act prohibits allowance of any expenditure incurred in relation thereto. Income from deployment of funds in shares earned by wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree income. The books of account have been examined by the AO, who has held that disallowance under Rule 8D, is warranted. In fact the AO has held as under:- "The assessee has not provided any separate account for earning of exempt income. The assessee has made investments for earning exempt income and managing such a large portfolio entail expenses right from diversion of manpower/staff for indulging in investment activities to various activities like visiting banks, use of vehicle and telephone, use of internet if portfolio management is web based, cost of computer & its depreciation, computer operator, consequent electricity, use of office premises, fee charged by Mutual Fund agents/bankers (Annual Fee), portfolio record maintenance and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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