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TMI Blog2013 (10) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assesse that the entire shares were taken as stock in trade and the dividend income was just incidental to it. The order set aside and the matter restored to the file of the AO for deciding the quantum of disallowance afresh, in accordance with law - The assessee will be at liberty to raise its contentions in this respect - The A.O. will give proper opportunity to the assessee to present its case and produce documents, if any - The AO will be at liberty to call for any record/evidences or statement etc. from the assessee as may be required by him for deciding the issue under consideration – Decided in favour of Assessee. - ITA No. 673/Mum/11, ITA No. 2579/Mum/12 - - - Dated:- 25-9-2013 - Shri Rajendra Singh And Shri Sanjay Gar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in shares which include those transactions which subsequently yielded dividend income, which was exempt. Therefore, the expenses debited to P L Account include expenditure incurred for undertaking transactions of shares which yielded exempt income. Any expenditure incurred for undertaking transactions for shares which subsequently yielded exempt income was required to be treated as expenditure incurred for earning of exempt dividend income. The assessee however, did not maintain any details of expenses incurred for undertaking transactions of shares which had yielded exempt income. The amount of such expenditure was, therefore, required to be determined as per a reasonable methodology. However after holding so, he adopted the methodology/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nwards. The present case is relating to the A.Y. 2007-08. In such year, obviously Rule 8D could not have been applied, but the disallowance was required to be worked out on some reasonable basis. The ld. CIT(A) did not consider the computation made by the assessee while adopting his formula to calculate the disallowance. He also did not consider the contention of the assesse that the entire shares were taken as stock in trade and the dividend income was just incidental to it. 7. At this stage the ld. DR has contended that even in case of investment in shares, some administrative expenses would have been incurred by the assessee for which disallowance has to be made. 8. Under such circumstances, we set aside the impugned order and restor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Rules for determining the amount of expenditure in relation to exempt income, if, the AO is not satisfied with the correctness of the claim made by the assessee in respect of such expenditure. However, a perusal of the assessment order reveals that the AO without recording any dissatisfaction with regard to the calculations and computation made by the assessee, straightway applied Rule 8D against the mandate of the provisions of section 14A of the Income Tax Act. We may observe that no details were called for by the AO from the assessee while making the disallowance under consideration. As observed above, he straightway applied Rule 8D. 13. The ld. CIT(A) also confirmed the disallowance made by the A.O. without considering ..... X X X X Extracts X X X X X X X X Extracts X X X X
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