9911796707
TMI Blog2013 (7) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14A of the Income Tax Act, 1961. 2. Facts in brief: The assessee is a non banking finance company and is engaged mainly in the investment business. For the relevant year, the assessee has earned dividend income of ₹ 13,89,40,620, which was claimed as exempt under section 10(34) in the return of income. For the purpose of disallowance under section 14A, the assessee itself has disallowed a sum of ₹ 9,00,907, for the purpose of earning the exempt income. The assessee, in the audit report had given a working of disallowance under section 14A, which has been incorporated by the Assessing Officer at Page 2 of the assessment order. In sum and substance, the assessee submitted that out of the total expenditure of ₹ 2.12 cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is managing a huge fund and have also earned huge income which is exempt, therefore, for the purpose of disallowance under section 14A, entire expenditure relatable to exempt income should be taken at ₹ 24.11 lakhs, that is, the amount of expenditure which has been claimed in the Profit Loss account. Thus, additional disallowance of ₹ 15.11 lakhs was made. 5. The learned Commissioner (Appeals), following the decision of Mumbai Bench of the Tribunal in Hoshanji D. Nanavati v/s ACIT, ITA no.3567/Mum./2007, order dated 18th March 2011, held that insofar as the depreciation is concerned, the same cannot be disallowed or can be held to be attributable to earning of exempt income. Thus, the amount of depreciation which is at & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit Loss account has to be disallowed. 8. We have heard the rival contentions and perused the relevant findings ff the Assessing Officer as well as the learned Commissioner (Appeals). The assessee is engaged in the investment business and has deployed huge fund of more than ₹ 441.47 crores (as noted by the Assessing Officer at Page 4 of the assessment order) and on deployment of such fund, it has earned dividend income of ₹ 13,89,40,620. For the purpose of disallowance, the assessee has disallowed sum of ₹ 9,00,907, which can be said to be attributable for earning of exempt income and, thereafter, has not claimed bad debt written off at ₹ 8,00,000. In effect, the disallowance of ₹ 17,00,907, was claimed to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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