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TMI Blog2013 (6) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... stion of law arises.In favour of assessee Compensation paid to property owner - whether a revenue expenditure incurred for business when it was compensation for non-occupation and a capital loss in nature - Held that:- The transaction in respect of which the compensation was paid arose during the course of business and was for the purpose of business. The expense has been incurred by the assessee to protect its interest and in lieu of the claims that could have been raised by the landlord. The incurring of expenditure has not been doubted by the Revenue. The Apex Court in case of J.K. Wollen v. CIT [1968 (8) TMI 15 - SUPREME Court] has held that in applying the test of commercial expediency for determining whether an expenditure was who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the following manner: "Whether the Appellate Tribunal has substantially erred in holding that disallowance u/s. 14A required "finding of incurring of expenditure" for disallowance of part of administrative expenditure u/s. 14A, in the face of facts that infrastructure and human resources of Bank were employed for investing activities which earned exempt income, particularly, when the assessee itself disallowed certain part of interest expenditure u/s. 14A?" 3. The issue pertains to disallowance under Section 14A of the Act made by the Assessing Officer which was partially deleted by the CIT(A). Such order of CIT(A) gave rise to cross appeals at the hands of the assessee as well as the revenue. Tribunal confirmed the view of the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stments were from interest free funds available. In the present case, since the assessee has suo moto disallowed Rs. 5.53 crore u/s. 14A, respectfully following the decision of Bombay High Court, we are of the view that in the facts of the present case, no further disallowance over and above than what has been disallowed by the Assessee is called for. As far as disallowance of other administrative expenses is concerned, the undisputed fact is that the disallowance has been made by the AO without giving a finding as to how much administrative expenditure has been incurred to earn the exempt income. In the case of Hero Cycles (supra) the Hon'ble High Court has held that the contention of the Revenue that directly or indirectly some expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee had contracted with landlord to take a premise on lease for opening its branch though no formal agreement with the landlord was entered into. Based on the understanding, the landlord had started the construction of the premises as per the requirement of the assessee. Before the construction was completed the assessee came to know of the proposed construction of overbridge over the said property. The assessee was of the view that overbridge will cause hindrance to conduct the business and services. Accordingly it decided to terminate the understanding with the landlord. Based on the negotiation and understanding, the assessee agreed to compensate the landlord for the work done it by paying the compensation and the landlord agreed to wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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