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TMI Blog2016 (4) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative reiterated his submissions and argued that the total exempted income received by the assessee is B88,252/- and assessee has voluntarily disallowed B16,770/- whereas the ld. Assessing Officer calculated disallowance under Rule 8D B2,57,857/- which is at higher side on comparison with income received and prayed deletion. We after considering the apparent facts and judicial decision of M/s.Joint Investments P. Ltd vs. CIT [2015 (3) TMI 155 - DELHI HIGH COURT ] were held that disallowance should be restricted to the extent of exempted income. Therefore, we set aside order of the Commissioner of Income Tax (Appeals) on this ground and remit the issue in dispute to the file of the Assessing Officer, who shall verify and examine the disallowance on the ratio of judicial decision. - I.T.A. Nos.1810 & 1811/Mds/2014 - - - Dated:- 26-2-2016 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER For The Appellant : Shri. N. Vijaykumar, C.A. For The Respondent : Shri. A.B. Koli, IRS, JCIT. ORDER PER G. PAVAN KUMAR, JUDICIAL MEMBER: The Appeals filed by the assessee are against different orders of the Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Profit and Loss account as computer software expenses and relied on the decisions of various High Courts and treated such expenses as capital expenditure and allowed depreciation at 60% B1,62,477/- and disallowed B.1,08,318/- as excess claim and completed assessment alongwith other disallowance and passed order u/s.143(3) of the Act Dt.24.12.2008. Aggrieved, the assessee filed an appeal with the Commissioner of Income Tax (Appeals). 4. In the appellate proceedings the ld. Authorised Representative submitted that Assessing Officer disallowed B21,000/- treating the fine as violation of law and assessee filed written submissions before Commissioner of Income Tax (Appeals) considering the expenses as contractual in nature. The assessee received dividend income on investments and also no expenditure was incurred for earning exempted income. The ld. Assessing Officer considered Co-ordinate Bench decision of M/s. Ind Bank Merchant Banking Securities Ltd in ITA No.420/Mds/98, Dated 14.04.2004 and disallowed u/s.14A of the Act at B3,22,670/- being 5% of exempted income. The ld. Authorised Representative submitted the disallowance is on the higher side and supported with the decision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorised Representative submitted that company has not incurred any expenditure to earn dividend income of B64,53,414/-. The ld. AO relied on the jurisdictional Tribunal decision and disallowed 5% of exempted income at B3,22,670/- being higher side and prayed for restricting to 2%. The ld. Authorised Representative produced invoice copies of software at page no.7 to 13 of paper book with description of software needed periodical upgradation and yearly renewal and prayed for allowing the same as Revenue Expenditure. 6. Contra, the ld. Departmental Representative relied on the order of the lower authorities and objected to the submissions of the assessee. 7. We heard the rival submissions, perused the material on record and judicial decisions cited. The ld. Authorised Representative submitted payment of B21,000/- as fine is in lieu of non submission charges levied and partially collection of margin and argued that as per the terms of contract with NSCCL such payments are always compensatory in nature. We are of the opinion on the basis of the debit note and debit advices though in debit advice it was referred as penalty for initial margin summary statement they take the chara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that loss was incurred due to mistake of future options transactions and same be allowed. The ld. Commissioner of Income Tax (Appeals) on verifying the submissions and also circumstances of incurring loss directed the Assessing Officer to verify and pass order in accordance with law and partly allowed the ground. 10. During the year, the assessee received dividend income of B88,252/-. The ld. AO by applying provisions of Sec. 14A r.w.r. 8D calculated the disallowance whereas assessee suo-motu disallowed B16,770/- as expenditure incurred for earning such exempted income. The ld. Assessing Officer considering the disallowance by the assessee made additional disallowance of B2,57,857/- and added to the Returned income. Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). The ld. Commissioner of Income Tax (Appeals) considered the submissions of the assessee and decisions relied and has examined the issue based on the Jurisdictional decision of Tribunal were disallowance is made mandatory and confirmed the findings. The Assessing Officer explained the law prior to assessment year 2008-09 has no applicable to current assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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