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2017 (5) TMI 839 - ITAT MUMBAIDisallowance under Rule 8D(ii) on account of interest expenses - addition u/s 14A - primary onus/burden to prove - Held that:- As observed from the perusal of the audited financial statement of the assessee that the “investments” of ₹ 45.83 crores are held as ‘investment’ and not as ‘stock in trade’ and hence the issue of applicability of section 14A of the Act to ‘stock in trade’ do not need require adjudication by us. As per section 14A of the Act where any expenditure is incurred by the assessee in relation to the income which is not includible in total income of the assessee such expenses shall not be allowed as expenditure. Thus, disallowance of such expenditure incurred in relation to earning of income which does not form part of total income under provisions of this Act shall be computed having regard to accounts of the assessee as provided in section 14A(2) of the Act. The matter needs to be set aside and restored to the file of AO for re-computing the disallowance u/s. 14A of the 1961 Act of the expenditure incurred in relation to the earning of income which does not form part of the total income having regards to the accounts of the assessee in accordance with our above directions. The assessee is directed to produce working of disallowance of expenditure incurred in relation to the earning of income which does not form part of the total income having regards to the accounts of assessee as is contemplated u/s 14A of the 1961 Act. The primary onus/burden is on the assessee to produce such working as the said facts are especially in the knowledge of the assessee. If the AO is not satisfied with the working as is submitted by the assessee as such disallowance cannot be worked out keeping in view accounts of the assessee, the AO will be justified in invoking Rule 8D of the 1962 Rules - Decided partly in favour of assessee for statistical purposes.
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