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TMI Blog2016 (11) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 10.05 crores towards administrative expenses which needed to be scrutinized by the authorities to compute indirect expenses which were incurred for earning the exempt income for which onus is on the assessee to submit the details before the authorities. In our considered view, the matter needs to be set aside and restored to the file of the A.O. for de-novo determination of the administrative and other indirect expenses to be disallowed u/s 14A of the Act and accordingly we set aside matter to the file of the A.O. who is directed to work out the reasonable disallowance towards indirect expenses incurred for earning exempt income having regards to the accounts of the assessee . - Decided in favour of assessee for statistical purpose. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices of the clearing and forwarding business. During the year under consideration, it was observed by the AO that the assessee has earned dividend income of ₹ 1,50,33,481/- which was claimed as exempt u/s 10 of the Act. From the P L account the A.O. observed that the assessee s investment as on 31st March 2010 was ₹ 15,52,80,656/-. Since the assessee has earned exempt income, the A.O. applied section 14A of the Act read with Rule 8D of Income Tax Rules, 1962 and disallowed an amount of ₹ 10,10,669/-. The assessee during the course of assessment proceedings u/s. 143(3) of the Act submitted that the assessee is engaged in the business of rendering services as clearing and forwarding agents. The assessee has made investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Hon ble Bombay High Court in the case of Godrej Boyce Manufacturing Co. Ltd.(2010) 328 ITR 81(Bom. HC) is not applicable to the assessee's case as there is no nexus between the investments made in the Mutual Funds the income from which is exempt and the expenditure incurred as all the investments were made by the assessee out of assessee s own funds. No interest was paid for the purposes of earning exempt income. The assessee submitted that there was redemption of investments during the year and the investments in Mutual Funds as on 31- 03-2010 was ₹ 15,31,55,660/- as against ₹ 21,30,01,868/- as on 31-03- 2009. The assessee explained the details of interest paid during the year which is as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Company Limited in ITA No. 626 of 2010 wherein Hon ble Bombay High Court held that even if the assessee has utilized its own funds for making investments which had resulted in exempt income but still the disallowance of expenditure incurred in the earning of exempt income is to be made. The AO accordingly worked out the disallowance of ₹ 10,10,669/- u/s 14-A read with Rules 8-D of the Income tax Rules, 1962 vide assessment order dated 15-02-2013 passed by the AO u/s 143(3) of the Act. 4. Aggrieved by the assessment order dated 15-02-2013 passed by the AO u/s. 143(3) of the Act, the assessee filed appeal with the learned CIT(A) and reiterated the submissions as were made before the AO. The additions made by the AO of ₹ 84,65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders dated 15-02-2016 in ITA No. 7435/Mum/2011 and ITA No. 7849/Mum/2011 both for the assessment year 2008-09 and ITA No. 6518/Mum/2012 for the assessment year 2009-10 whereby disallowance made by the authorities below by applying Rule 8D(2)(iii) of Income Tax Rules, 1962 read with Section 14A of the Act was reduced by the Tribunal from ₹ 14,61,622/- to ₹ 6,61,622/- for the assessment year 2008-09.Similar relief was granted by the Tribunal for the assessment year 2009-10 The ld. Counsel drew our attention to the paper book page No. 22, 25 26 which consists of part of audited financial statement of the assessee whereby all the details of investments were shown which are mostly in mutual funds to the tune of ₹ 153,155,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has not submitted any details of the expenses incurred and claimed that no expenditure has been incurred which could be attributable to the earning of exempt income. The assessee has incurred expenses of ₹ 8.31 crores towards personnel costs and ₹ 10.05 crores towards administrative expenses which needed to be scrutinized by the authorities to compute indirect expenses which were incurred for earning the exempt income for which onus is on the assessee to submit the details before the authorities. In our considered view, the matter needs to be set aside and restored to the file of the A.O. for de-novo determination of the administrative and other indirect expenses to be disallowed u/s 14A of the Act and accordingly we set ..... X X X X Extracts X X X X X X X X Extracts X X X X
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