9911796707
TMI Blog2016 (1) TMI 309X X X X Extracts X X X X X X X X Extracts X X X X ..... n the solitary ground raised therein the assessee has challenged the action of Ld. CIT(A) in upholding the order of Assessing Officer by disallowing the expense of Rs. 14,40,020/- on account of exempted income. 2. Briefly stated facts are that assessee is a private limited company and having valid lincence of Non-Banking Financial Corporation (NBFC for short) and is engaged in the business of trading and investment in shares, mutual funds. During the year, assessee has earned exempted income dividend of Rs. 2,30,23,830/- out of trading and investment in share. The AO found that assessee has not claimed any expenditure in connection with exempted income in his books of account. On question put by AO to assessee about the disallowance of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile the contribution of dividend income is 97.04% of the total income. The majority of the expenditure is therefore required to be apportioned for the earning of dividend income. Ld. CIT(A) has relied in the decision of Hon'ble Bombay High Court in the case of Godrej & Boyce Manufacturing Co. Ltd. v. DCIT (2010) 328 ITR 81 (Bom) the relevant extract portion of the order of Ld. CIT(A) in para-10 is extracted below for the sake of clarity and convenience:- "10. Therefore, in the facts & circumstances as discussed and following the judgments of the Hon'ble Appellate Authorities including the Hon'ble jurisdictional High Court in the case of ISG Traders Ltd. vs. CIT-III, Kolkata; Dhanuka & Sons v. CIT (Central)-1; the Hon'ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly taken in the meeting of Board of Directors for which administrative expenses are incurred. It is therefore, not correct to say that income can be earned by incurring no or nominal expenditure. This aspect of the matter has also received careful attention of the Chennai Bench in the case of Southern Petrochemical Industries v. DCIT (2005) 93 TTJ 161 (Chennai) after comprehensive consideration of all the relevant aspects of the case including the provisions of law, the Tribunal has held as under:- "Whether to invest or not to invest and whether to retain the investments or to liquidate the same are very strategic decisions which the management is called upon to take. These are mindboggling decisions and top management is involved in tak ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
