TMI Blog2022 (1) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the assessee has materialized or not. Since the assessee could not furnish any evidence or substantiate its claim other than mere statement either before the AO or before CIT(A) or before us that these expenses were in fact incurred for the purpose of business of the assessee, we do not find any infirmity in the order of the CIT(A) on this issue. Accordingly, the same is upheld and the ground raised by the assessee is dismissed. - ITA No.2086/Del/2018 - - - Dated:- 28-1-2022 - SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER Assessee by : Shri M.P. Rastogi, Advocate Revenue by : Shri N.K. Bansal, Sr. DR ORDER PER R.K. PANDA, AM: This appeal filed by the assessee is directed against the order dated 23rd January, 2018 of the CIT(A)-7, New Delhi, relating to assessment year 2014-15. 2. The grounds of appeal No. 1 and 2 raised by the assessee are as under:- 1. That both the Ld. CIT(A) and Ld. AO erred in law and in facts in disallowance of Rs.1,08,69,547/- u/s 14A in a mechanical way without appreciating the facts that the assessee himself has disallowed Rs 2.41 lakhs and that there cannot be any further disallowance u/s 14A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e balance amount of Rs.1,08,69,547/-. 8. In appeal, the ld.CIT(A), following his order for AY 2010-11, sustained the disallowance by observing as under:- 3.2. It is noted that similar issue was adjudicated by CIT(Appeals)-36 for the A.Y. ,2010-11 in the appellant s case in New Appeal No. 215/2016-17; Old Appeal No. 157/2015-16 dated 12.05.2017 in which disallowance u/s 14A made by the AO was confirmed. Operative part of the order is reproduced as under: (i). It is observed from the details of previous A.Ys that the assessee had offered the whole of the amount as disallowance. It could not be explained as to how the same investment with group companies became strategic this year and was not so in the earlier year. (ii). It is also seen that the AO has in the assessment for A.Y 2014-15 also disallowed the amount on the same grounds stating that In view of the above, the assessee is not justified in reducing the proportionate disallowance of common administrative expenditure on account of dividend received from Group Company. The assessee has made investments, resulting income from which is exempt under the provisions of the I.T Act. Thus the provisions of the Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble jurisdictional High Court, following the decision of the Hon ble Bombay High Court in the case of Godrej Boyce Mfg. Co. Ltd. vs. DCIT, reported in 328 ITR 81, has held that the satisfaction of the AO must be arrived at on an objective basis. It is only when the AO is not satisfied with the claim of the assessee that the legislature directs him to follow the method that may be prescribed. In a situation where the accounts of the assessee furnish an objective basis for the AO to arrive at a satisfaction in regard to the correctness of the claim of the assessee of the expenditure which has been incurred in relation to income which does not form part of the total income, there would be no warrant for taking recourse to the method prescribed by the rules. It is only in the event of the AO not being so satisfied that recourse to the prescribed method is mandated by law. 10.3 The ld. Counsel for the assessee, referring to the order of the Tribunal for AY 2010-11, vide ITA No.3796/Del/2015, order dated 13.11.2019, submitted that the Tribunal has deleted the disallowance made by the AO u/s 14A(2) of the Act in absence of satisfaction note. He submitted that since no expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... putation filed by the assessee, in the instant case, is incorrect. Admittedly, the assessee has not incurred any expenditure directly relating to any exempt income. We find, the ld.CIT(A), following the order for AY 2010-11 in assessee s own case, has confirmed the disallowance made by the AO u/s 14A of r.w. Rule 8D of IT(AT) Rules. However, a perusal of the order of the Tribunal in assessee s own case for AY 2010-11, vide ITA Nos.3796/Del/2015 and 4574/Del/2015, order dated 13.11.2019, shows that the Tribunal at para 29 of the order has set aside the order of the CIT(A) and directed the AO to delete the addition by observing as under:- 29. We have considered the rival arguments made by both the sides; perused the orders of the Assessing Officer and the CIT(A); and the paper book filed on behalf of the assessee. As held by the Assessing Officer himself, the assessee has received a dividend income of Rs.39,97,165/- on shares held as stock-in-trade which has been claimed as exempt. It is also held by the Assessing Officer that the assessee has made suo motu disallowance of Rs.55,32,603/- u/s 14A of the Act. Therefore, we find merit in the argument advanced by the ld. counsel that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observing as under:- 4.2. I have carefully considered the assessment order and written submission furnished by the Ld. AR. The AO disallowed Rs.18,37,557/- claimed as business promotion expenses as no justification or evidence to the effect that these expenses were incurred for the purpose of business of the appellant considering the nature of its business i.e. trading in mutual funds, shares etc was furnished. In appellate proceedings, the appellant has made very general submissions for allowability of the impugned expenditure. Mere assertion, without adducing any material evidence and documentation does not establish that the impugned expenditure is allowable as a business expenditure. The appellant has not furnished any cogent explanation or furnished the break-up of the business promotion expenses disallowed. In the absence of any details pertaining to the claim, I do not see any reason to interfere with the disallowance. In view thereof, disallowance of Rs. 18,37,557/- made by the AO is upheld. This ground of appeal is ruled against the appellant. 18. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 19. The ld. Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,954/- incurred by the director and Rs.5,48,603/- pertaining to purchase of foreign exchange. We find, the ld.CIT(A) sustained the addition made by the AO the reasons of which have already been reproduced in the preceding paragraph. We do not find any infirmity in the order of the CIT(A) on this issue. Admittedly, the assessee is an NBFC company engaged in trading of units of various mutual funds and conducting investment activities in shares and fixed maturity plans. However, there is no evidence on record as to whom the directors who visited the foreign country met and as to what is the outcome of the said meeting and whether any of the statements made by the assessee has materialized or not. Since the assessee could not furnish any evidence or substantiate its claim other than mere statement either before the AO or before CIT(A) or before us that these expenses were in fact incurred for the purpose of business of the assessee, we do not find any infirmity in the order of the CIT(A) on this issue. Accordingly, the same is upheld and the ground raised by the assessee is dismissed. 22. In the result, the appeal filed by the assessee is partly allowed. Order pronounced in the ..... 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