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TMI Blog2013 (8) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... not point out any specific error in the above quoted order of the ld. CIT(A). Therefore, we do not find any good and justifiable reason to interfere with the order of the ld. CIT(A) which is confirmed and the grounds of appeal of the Revenue are dismissed. - I.T.A.No. 1138/Mds/2013 - - - Dated:- 5-8-2013 - SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER For the Appellant: Shri N. Madhavan, Jt. CIT For the Respondent: Shri Saroj Kumar Parida, Advocate O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER This is an appeal filed by the Revenue against the order of the ld. CIT(A-1), Madurai (I/c), dated 19.2.2013. 2. The Revenue has taken three grounds of appeal in which the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4A requires finding of incurring of expenditure where it is found that for earning exempt income no expenditure has been incurred, disallowance u/s 14A cannot withstand. The assessee further submitted that the Delhi Bench of the Tribunal in the case of ACIT vs Sun Investments, 8 ITR (Trib) 33 has held that unless the Assessing Officer established that specific expenditure has been incurred by the assessee for earning exempt income there can be no disallowance u/s 14A. 5. The ld. CIT(A), after considering the submissions made by the assessee, restricted the disallowance to 2% of the exempt dividend income. While doing so, the ld. CIT(A) has held as under: 4.2 I have considered the facts pertaining to the case and the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble Jurisdictional High Court in T.C.(A.) No. 2621 of 2006 in M/s. Simpson and Co. Ltd. vs. DCIT decided on 15.10.2012, wherein it has held as under: This Tax Case (Appeal), filed at the instance of the assessee as against the order of the Income Tax Appellate Tribunal for the assessment year 2001-02, was admitted on the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the Tribunal was justified in upholding the estimated disallowance of 2% of the expenditure, as being incidental to earning dividend income, under section 14-A of the Act although no actual expenditure was incurred? 2. Whether on the facts and in the circumstances of the case,the Tribunal was justif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of the expenditure is restricted @ 2% of the exempt income as returned by the assessee. With the above observation the Assessing officer is directed to disallow expenditure equivalent to 2% of the exempt income earned by the assessee. 5. After consideration of all the submissions on all the grounds, the appeal is partly allowed. 6. The ld. DR very fairly conceded that the ld. CIT(A) has restricted the disallowance of expenditure u/s 14A of exempt income at 2% of the dividend income by following the decision of the Hon'ble Madras High Court. 7. On the other hand, the ld. A.R of the assessee supported the order of the ld. CIT(A). 8. After considering the rival submissions and perusing the materials on recor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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