9911796707
TMI Blog2016 (11) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 if the AO having regarding to the accounts, is not satisfied with the correctness of the claim of the asessee in respect of such expenditure in relation to such exempt income, is empowered for making disallowance as per rule 8D. In the case in hand, no finding is recorded by the AO in this regard. On the contrary, the ld. CIT(A) has given a finding after examining the accounts of the assessee. The AO has not brought on record any material to show that the assessee has incurred any expenditure in relation to the income which do not form part of the total income. - Decided in favour of assessee - ITA No. 100/JP/16 - - - Dated:- 23-9-2016 - Shri Kul Bharat, JM And Shri Vikram Singh Yadav, AM Assessee by : Shri Sanjay Jhanwar (ADV) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant that expenditure amounting to ₹ 1,29,713/ had been incurred by it for earning the exempt income, which has already been disallowed by the appellant in its computation of income. Further the investment has been made by it in its subsidiary company and not in the shares of any unrelated party. Therefore the primary object of investment is holding and controlling stake in the group concern and not earning any income out of investment. Further the investments, were made out of own funds for long term basis for having business control over these subsidiaries. Therefore, in view of the fact that the investment are in the group concern, I do not find any reason to observe that the appellant would have incurred any administrative exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture and the income which does not form part of the total income. In the instant case under consideration, the appellant has already disallowed a sum of ₹ 1,29,713/- for the exempt income, therefore it was incumbent on the AO to find out as to whether the assessee has incurred any expenditure beyond ₹ 1,29,713/- in relation to income which does not form part of the total income and if so to quantify the expenditure of disallowance. The AO has not brought on record any fact or material to show that any expenditure beyond ₹ 1,29,713/- has been incurred on the activity which has resulted into both taxable and non-taxable income. Therefore in the absence of any finding that expenditure has been incurred beyond ₹ 1,29,7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO has not recorded his satisfaction as to how the expenditure disallowed by the assessee of ₹ 62,9878/- towards administrative expenses is not reasonable. Further we find that the assessee has demonstrated by placing sufficient material on record that no borrowed funds were utilized for making investment and wherefrom the exempt income is earned. In our considered view, the provisions of section 14A of the Act read with rule 8D of Income Tax Rules, cannot be invoked in mechanical way by AO. As per section 14A(2), the AO is required to determine the amount of expenditure incurred in relation to such income which does not form part of the total income under the Act and in accordance with rule 8D of Income Tax Rules, 1961 if the AO h ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
