9911796707
TMI Blog2015 (10) TMI 1587X X X X Extracts X X X X X X X X Extracts X X X X ..... at rule 8D cannot be made applicable without first rejecting the claim of the appellant as envisaged under sub-section (2) of section 14A. 2. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming the disallowance of ` 10,93,779 under section 14A instead of Rs. 20,015 as determined by the appellant. Under the facts and circumstances of the matter, he ought to have upheld the disallowance under section 14A at Rs. 20,015 only." 2. The facts of the case are that the assessee received dividend income of Rs. 3,48,96,184, which was claimed exempt from income tax and hence, the assessee offered an amount of Rs. 15,37,932 for disallowance under section 14A, in its return of income on estimate basis. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord. 5. The learned Departmental Representative relied on the orders of the authorities below. 6. After hearing both the parties, we find that the present issue is covered in favour of the assessee by the decision of the Tribunal in assessee's own case in ITA no.7370/ Mum./2012, order dated 20th March 2015, for the assessment year 2009-10, wherein the co-ordinate bench, while speaking through one of us (A.M), allowed the claim of the assessee for the reasons as stated in Para-6 of its order which is reproduced below:- "6. We Have heard the rival submissions and also perused the relevant material placed on record. From the perusal of the profit and loss account, it is seen that the assessee has debited following indirect expenses:- ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is not satisfied with the correctness of the claim in respect of such expenditure incurred in relation to the exempt income. In other words the A.O. has to examine the nature of expenditure vis-a-vis the earning of the exempt income. Here in this case the assessee had offered Rs. 2,40,000 for the purpose of disallowance. However, the A.O. without examining the same has proceeded to apply rule 8D, as if it is a natural corollary to section 14A. The basic requirement the law is to examine the nature of the expenditure which can be said to attributable for the earning of the exempt income. If the assessee has incurred major expenditure for its core business, then it is incumbent upon the A.O. and is mandatory for him to examine th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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