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TMI Blog2014 (8) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... not be held to be applicable, because the Assessing Officer having regard to the accounts of the assessee as well as the nature of expenses incurred which can be said to be attributable for the earning of exempt income, has not pointed out what are the expenses which could be said to be have been incurred or attributable on the administrative expenses. Only when the Assessing Officer is not satisfied with the correctness of the claim of the assessee, he can proceed to apply rule 8D. In this case, such a requirement has not been fulfilled by the Assessing Officer. Accordingly, we do not find any merit in the disallowance made by the Assessing Officer under rule 8D and accordingly, the disallowance made by the Assessing Officer under rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bited in the Profit Loss account are entirely for the business purpose. The Assessing Officer rejected the assessee s contention and held that rule 8D is to be applied and accordingly he disallowed 0.5% by taking the average value of the investment, which worked out to ₹ 15,89,295. 5. Before the learned Commissioner (Appeals), it was submitted that before invoking the provisions of rule 8D, the Assessing Officer has not given any particular reason or identified any expenditure which could have been incurred for the purpose of earning of tax free dividend income or making the investment. The administrative expenses which have been incurred are purely for business purpose and whatever was attributable for the dividend income, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of equity shares in subsidiary company which too was devolved on demerger of the said company in the earlier years. Insofar as the mutual fund are concerned, as on 31st March 2009, the mutual funds were not appearing in the Balance Sheet. Thus, no effort was made or any time was consumed for making any analysis of the investment which has resulted into exempt income of ₹ 26,310, by way of dividend. The assessee has already disallowed the sum of ₹ 1,200 on account of demat charges which is sufficient and directly attributable to the exempt income. Under these facts and circumstances, we are of the opinion that simply relying on rule 8D, for the purpose of disallowance, cannot be held to be applicable, because the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X
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