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TMI Blog2014 (1) TMI 1035X X X X Extracts X X X X X X X X Extracts X X X X ..... The only reasonable and logical conclusion can be to allocate the expenditure between the exempt income and non-exempt income – The Ao has computed disallowance by applying Rule 8D which is applicable w.e.f. A.Y. 2008-09 - Since the actual expenditure incurred by the assessee was only Rs. 4,27,376/- out of which a sum of Rs. 7,000/- was separately disallowed by the Assessing Officer - The disallowance should be restricted to Rs. 4,20,376 - The assessee has not pointed out any mistake in the working of disallowance under Rule 8D by the Assessing Officer - The disallowance under Rule 8D as worked out as per the formula given in the Rules was more than the actual expenditure, the Assessing Officer has rightly restricted the disallowance to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012, order dated 11th December, 2012. (ii) M/s ACME Computers Ltd. Vs. DCIT and Another - ITA No.5386/Del/2012 & 5387/Del/2012, order dated 28th February, 2013. 4. It is further submitted by the learned counsel that the decision of a Division Bench is binding on another Division Bench and if for any reason the Division Bench is unable to agree with the decision of another Division Bench, they should refer the matter to the Special Bench and should not take a contrary view. He further submitted that since in this case no expenditure was incurred by the assessee for earning of exempt income, no disallowance under Section 14A can be made. He, therefore, submitted that the disallowance made by the Assessing Officer and sustained by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ained by the learned CIT(A). The assessee has disputed the disallowance mainly on two grounds - (i) that no satisfaction is recorded by the Assessing Officer as envisaged by sub-section (2) & (3) of Section 14A, and (ii) that no expenditure was incurred by the assessee for earning of exempt income. In support of the first contention, the learned counsel for the assessee has relied upon the two decisions of ITAT Delhi Benches in the case of P.P.C. Business & Products Pvt. Ltd. (supra) and M/s ACME Computers Ltd. (supra). So far as the legal proposition put forth by the learned counsel is concerned, there cannot be any dispute. As per sub-section (2) of Section 14A, the Assessing Officer can embark upon determination of amount of expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of Section 15A is not applicable. The Assessing Officer examined the above contention at length considering various judicial pronouncements at pages 3 to 5 of his order and thereafter concluded as under:- "2.9 Very recently in the case of M/s Renaissance Asset Management Co.(P) Ltd. vs. Assessing Officer ITAT, Delhi 'D' Bench (2010) 2 ITR (Trib) 765, after relying on the case of CIT vs. Rejender Prasad Moody (1978) 115 ITR 519, it was held that it is not relevant as to whether any dividend income was received by the assessee or not and what is the amount of dividend income. Any expenditure relatable to any expenditure relatable to investment activity has to be construed as expenses incurred for earning dividend income and the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee's claim before the Assessing Officer. Before the Assessing Officer, the only limited claim by the assessee was that no exempt income was earned by the assessee. However, before us, the assessee claimed that no expenditure was incurred by it for earning of exempt income and in this regard, he referred to the assessee's profit & loss account and balance sheet and pointed out that the total expenditure incurred by the assessee was only Rs. 4,27,376/- which was mainly administrative expenditure and preliminary expenses written off. He also claimed that no fresh investment was made by the assessee during the year under consideration and it is only the old investment which continued in the year under consideration. The assessee's c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,210.00 480,110.00 (P.Y 330010 Equity shares of Rs.10/- each) IV) 19,19,810 Equity shares of Rs.10/- each of P.P.C. Business & Products Pvt.Ltd. 19,198,100.00 19,198,100.00 (P.Y 19,19,810 Equity shares of Rs.10/- each) V) 22,17,500 Equity Shares of Rs.10/- each of Surya Vinayak Industries Ltd. 101,325,000.00 101,325,000.00 (P.Y 21,70,000 Equity shares of Rs.10/- each) VI) 4,96,000 Equity Shares of Rs.10/- each Of Allied Perfumers P.Ltd. 5,952,000.00 5,952,000.00 (P.Y 4,96,000 Equity shares of Rs.10/- each) VII) Nil Equity shares of Rs.10/- each Of Global Business India P.Ltd. -- 25,000,00 (P.Y 50,000 Equity shares of Rs.10/- each) VII) 239,200 Equity shares of Rs.100/- each Of SVIL Mines Ltd. 105,600,000.00 105,600,000.00 (P.Y 239,200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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