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TMI Blog2012 (7) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... was incorrect - though the statement was given by the assessee at the insistence of the A.O. and if if interest or any other expenses was not relatable to the exempt income, assessee by itself would have excluded such amounts from the said computation - An assessee cannot be allowed to approbate or reprobate according to its choice - against assessee. - ITA No.2102/ Mds /2011 - - - Dated:- 20-2-2012 - Abraham P George, George Mathan , JJ. For Appellant: Shri S Sathiyanarayanan , Adv. For Respondent: Shri R B Naik , CIT-DR-II ORDER Per: Abraham P George: In this appeal filed by the assessee , it is aggrieved that ld. CIT(Appeals) confirmed a disallowance of expenditure Rs. 19,77,109/- in relation to dividend income c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee marketing building materials and also doing vehicle sales, travels, cargo, etc., had filed its return for the impugned assessment year admitting total income of Rs. 1,95,03,811/-. Though assessee had admitted receipt of dividend income of Rs. 48 ,45,710 /- and claimed it as exempt, there was no disallowance of expenditure made by the assessee in relation to earning of such income. The A.O. asked the assessee to explain why proportionate amount of expenditure should not be disallowed under Section 14A of Income-tax Act, 1961 (in short 'the Act'). As per the A.O., through letter dated 20.12.2010, assessee had admitted a sum of Rs. 19,77,109/- as the amount of disallowance that was to be made under Section 14A of the Act. It see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to learned A.R., it was only at the instance of the A.O. that assessee submitted such a computation and it ought not have been taken as an admission for making disallowance. As per the learned A.R., the investments were made out of own profits and no borrowed funds were involved and therefore, no part of the interest on loans could have been allocated against earning of exempt income. Filing a copy of letter dated 16th December, 2010, addressed to the Assessing Officer, learned A.R. submitted that expenditure directly related to exempt income was clearly shown by the assessee as Nil' in the calculation made under Rule 8D. Therefore, according to him, the disallowance made was arbitrary and ought not have been sustained by the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to the Assessing Officer, the falsity of the assertions of the assessee is clear. Said letter reads as follows:- With reference to the above subject we are submitting the following details/documents. 1. Rent, Interest, Brokerage and Professional TDS reconciliation statement. 2. Statement of division wise interest paid details. 3. Statement of Rule 8D computation. 4. In Form 3CD annexure-VII serial no.5 the amount of Rs.8607390/- is printed instead of 860739/-. The said amount to the related party represents net amount receivable from South India House Estates and Properties limited. We enclosed the statement of transactions during the year for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the A.O. Assessee had given a statement of computation under Rule 8D of the Act. Even if we presume that the statement was given by the assessee at the insistence of the A.O., if interest or any other expenses was not relatable to the exempt income, assessee by itself would have excluded such amounts from the said computation. The said computation given by the assessee is reproduced hereunder:- OB CB Average Expenditure directly related to exempt income - Average value of Investment 276,428,200 276,321,000 276,374,600 Average value of Total Assets 3,908,731,255 3,872,641,000 Increase on account of Revaluation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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