9911796707
TMI Blog2022 (3) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... a that :- "1. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in reducing disallowance of Rs. 1,85,95,109/- to Rs. 9,45,651/- u/s 14A of the Income Tax Act, 1961 without considering the legislative intent to introducing section 14A by the Finance Act, 2001 as clarified by the CBDT Circular No.5/2014 dated 10.02.2014? 2. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in holding a principal that quantum of expenditure cannot be exceed the income of the assessee? 3. Whether on facts and in circumstances of the case, the Ld. CIT(A) is legally justified in deleting the disallowance of Rs. 98,430/- u/s 37(1) of the Act on account of 'interest on delayed payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; 1,74,25,912 A = Amount of interest 3,08,77,136 B = Average value of investments Investment as on 01.04.2011 12,86,32,549 Investment as on 31.03.2012 33,90,46,382 46,76,78,931 Average value of investments (467678931/2) 23,38,39,465 C = Average of Total Assets Total Assets as on 01.04.2011 40,54,70,851 Total Assets as on 31.03.2012 42,32,13,915 82,86,84,666 Average value of assets (828684666 / 2) 41,43,42,333 &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es below in the light of the facts and circumstances of the case. GROUNDS NO.1 & 2 6. Assessee company has earned dividend income of Rs. 9,45,651/- without making any suo motu disallowance. AO by invoking the provisions contained u/s 14A read with Rule 8D proceeded to make disallowance at Rs. 1,85,95,109/-. 7. Ld. CIT (A) following the decision rendered by Hon'ble Delhi High Court in case of Joint Investments (P.) Ltd. vs. CIT 372 ITR 694 restricted the disallowance to the extent of dividend income i.e. Rs. 9,45,651/- earned by the assessee company during the year under consideration by returning following findings :- "3.2.3 The contentions of the AO and submissions of the appellant have been duly considered. Respectfully following the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar deduction towards payment of interest on delayed payment of TDS was allowed". Since this payment made by the assessee cannot be treated as a tax but compensatory in nature, hence allowable expenses u/s 37 of the Act. So, finding no infirmity or perversity in the impugned findings, ground no.3 is determined against the Revenue. GROUND NO.4 11. AO made a disallowance of Rs. 3,41,848/- @ 10% of the total expenses on ad hoc basis claimed by the assessee company towards repair and maintenance expenses. Since AO has not disputed audited financials of the assessee company rather proceeded to make an ad hoc disallowance merely on the basis of surmises which is not sustainable in the eyes of law. Ld. CIT (A) after thrashing the facts proceeded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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