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TMI Blog2015 (10) TMI 306X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the customers, the assessee must have incurred bank charges for providing bank guarantee to the customers. Hence, under these facts, the disallowance made by the Assessing Officer as per Rule 8D is very much in order and therefore, we do not find any reason to interfere in the order of CIT(A) on this issue. - Decided against assessee. - ITA No.81/LKW/2012 - - - Dated:- 18-9-2014 - SUNIL KUMAR YADAV A.K. GARODIA , JJ. For The Appellant : S. K. Garg , P. K. Kapoor, For The Respondent : Y. P. Srivastava ORDER This is an assessee s appeal directed against the order passed by learned CIT(A)-I, Kanpur dated 23/11/2011 for the assessment year 2008- 2009. 2. The grounds raised by the assessee are as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer u/s 14A read with Rule 8D of Income Tax Rules is not justified. He placed reliance on the following judicial pronouncements: (i) CIT vs. Hero Cycles Ltd. [2010] 323 ITR 518 (ii) CIT vs. Deepak Mittal [2014] 361 ITR 131 (P H) (iii) Balrampur Chini Mills Ltd. vs. DCIT 140 TTJ (Kol) (UO) 73 (iv) Minda Investments Ltd. vs. DCIT [2011] 138 TTJ (Del) 240 (v) CIT vs. Winsome Texstiles [2009] 319 ITR 204 (P H) 4. As against this, Learned D.R. of the Revenue supported the orders of the authorities below. 5. We have considered the rival submissions. We find that it is noted by Assessing Officer in the assessment order on page No. 2 that the assessee was asked to furnish the details of interest and other expenses incurred by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. As per Schedule-21 of the audited accounts, available in the paper book, it is seen that the assessee has incurred an expenditure of ₹ 75.54 lac on account of bank commission and ₹ 38.16 lac on account of bank charges. Some portion of these expenses are definitely on account of furnishing of letter of guarantee by the bank to the customers of the assessee for realizing advance from customers and since those advances were admittedly used for making investment in Mutual Fund, some payment of such bank charges paid to the banks for furnishing bank guarantee is nothing but expenses incurred by the assessee in relation to earning of exempt dividend income. But no such detail was provided by the assessee before the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dend income. Hence, this judgment of Hon'ble Punjab Haryana High Court is also not applicable in the facts of the present case. 6.3 The third judgment cited by Learned A.R. of the assessee is the Tribunal decision in the case of Balarampur Chini Mills Ltd. (supra). In this case, it was held by the Tribunal that section 14A and Rule 8D can be invoked only when Assessing Officer is not satisfied with regard to the account of assessee that the claim of expenditure made by assessee is not correct and the claim made by the assessee that no expenditure has been made in relation to income which does not form part of total income under the Act is not acceptable. It was also held that neither the Assessing Officer nor the CIT(A) has recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Godrej Boyce Mfg. Co. Ltd. vs. Dy. C.I.T. Anr. [2010] 234 CTR 1. Since in the present case, the assessment year involved is 2008-09, this Tribunal decision is not applicable in the present case. 6.5 The next judgment cited by Learned A.R. of the assessee is the judgment of Hon'ble Punjab Haryana High Court rendered in the case of Winsome Textile Industries Ltd. (supra). In that case, it was the stand of the Revenue that even if the assessee has made investment in shares out of own funds, the assessee had taken loans on which interest was paid and all the money available with the assessee was in common kitty and therefore, disallowance made u/s 14A was justified. Under these facts, it was held that when the own f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over, the only explanation of the assessee regarding source of fund used for making investment was that the same is out of interest free advances received from customers but we have seen that the advances received from customers as on 31/03/2008 were not sufficient to cover the entire investment in shares of ₹ 694.84 lacs because the advance from customers as on 31/03/2008 was ₹ 122.04 lacs only. We have also seen that even if these advances were received by the assessee from the customers, the assessee must have incurred bank charges for providing bank guarantee to the customers. Hence, under these facts, the disallowance made by the Assessing Officer as per Rule 8D is very much in order and therefore, we do not find any reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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