9911796707
TMI Blog2016 (8) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to Rs. 22,22,000 out of electricity expense being 50% of the expenses claimed. The learned CIT (A) further failed to appreciate the arguments and contentions advanced in this behalf. 2. The learned CIT (A) erred on facts and in law in upholding disallowance of Rs. 3,04,830 u/s. 14A of the Act. He also failed to appreciate that the AO had failed to record her satisfaction as required under rule 8D. The learned CIT (A) further failed to appreciate the arguments and contentions advanced in this behalf. 3. The appellant craves leave to add, alter, delete or substitute all or any of the above grounds of appeal." 3. The brief facts of the case as emanating from records are: The assessee is a company registered under the provisions of Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax (Appeals), the assessee is in second appeal before the Tribunal. 4. Shri C.H. Naniwadekar appearing on behalf of the assessee submitted that the assessee company has been set up for upliftment of the women from the down trodden strata of the society by providing job opportunities. All the employees of the assessee company are women. M/s. Kirloskar Oil Engines Ltd. has provided factory shed at a very nominal rent to the assessee company. M/s. Kirloskar Oil Engines Ltd. is also sharing electricity expenses and has provided its own machinery free of cost to the assessee. The authorities below have brushed aside all the submissions made by the assessee while making disallowance of Rs. 22,22,000/- in respect of electricity expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red any expenditure whatsoever towards the earning of exempt income. The disallowance made is much more than the investment made. In support of his submissions the ld. Counsel for the assessee placed reliance on the decision of Hon'ble Karnataka High Court in the case of CCI Ltd. Vs. JCIT reported as 71 DTR 141 (Kar.). 5 On the other hand Shri Mukesh Jha representing the Department vehemently supported the findings of Commissioner of Income Tax (Appeals) in respect of disallowance confirmed. The ld. DR contended that the assessee has failed to show from the records the work done by the assessee. Since, the assessee has failed to show the quantum of work there is no question of granting any expenditure. The ld. DR submitted that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for M/s. Kirloskar Oil Engines Ltd. It is an admitted fact that the assessee is carrying on its activity from the premises/shed of M/s. Kirloskar Oil Engines Ltd. for which the assessee is paying very nominal rent. M/s. Kirloskar Oil Engines Ltd. has also provided machinery to the assessee for performing job work. The assessee has claimed electricity consumption charges which have been disallowed by the authorities below on ground that there is no corelation between the work performed and the consumption of electricity. We do not concur with the findings of authorities below on this issue. The Department has not disputed the fact that the assessee company has been promoted by the M/s. Kirloskar Oil Engines Ltd. for the purpose of upliftmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowance of Rs. 3,04,830/- u/s. 14A. The assessee has made investment of Rs. 2,04,527/- in M/s. Kirloskar Oil Engines Ltd. and other group concerns. The assessee has earned dividend of Rs. 3,56,000/-. The contention of the ld. AR of the assessee is that the assessee has not incurred any administrative expenditure on earning tax free income. It is not the case of the Revenue that the assessee has made investment from the interest bearing funds. We are of the considered view that the disallowance of Rs. 3,04,830/- made by the Commissioner of Income Tax (Appeals) is very much on the higher side. To meet the ends of justice disallowance of 5% of the exempt income earned would be fair and justified. Accordingly, the ground no. 2 raised by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
