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TMI Blog2017 (1) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... repairing.In our opinion,it is the duty of the assessees to produce evidence in their support if they claim that any expenditure was incurred for carrying out business. In the case under consideration,the assessee has failed to prove the genuineness of the expenditure incurred by it during the year under consideration. Therefore,we are of the opinion that order of the FAA does not suffer from any legal infirmity. X X X X Extracts X X X X X X X X Extracts X X X X ..... acts of the case under consideration were quite similar to the facts of AY.2009-10,that the assessee had claimed before the AO that it had not incurred any specific expenditure to earn exempt income,that he had not accepted the submission of the assessee,that there was no jsutification for disallowance out of interest expenditure because the deposit on which interest was paid had been invested into inter-corporate deposits which had earned interest,that there was no change in the facts even during the year under consideration.He directed the AO to delete the disallowance on account of interest as no borrowed funds were utilised for earning exempt income. With regard to disallowance under Rule 8D(iii) of the Rules,he held that the disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 14A does not enable the Assessing Officer to invoke Rule 8D without determining, in the first instance the correctness of the claim of the Assessee, having regard to the accounts of the Assessee. Subsection 2 of section 14A mandates that it is only when having regard to the accounts of the Appellant, if AO is not satisfied with the correctness of the claim then only he can proceed to make determination under Rule 8D. The satisfaction envisaged by subsection 2 of section 14A is to be objective satisfaction that has to be arrived at by the AO. This is a safeguard introduced by subsection 2 for fair and reasonable exercise of power by the AO. This view was also supported by the judgment of the Hon'ble Bombay Court in the case of Godre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art in para 5.2.1, same para in both the orders, the CIT(A) notes that Assessee could not establish the nexus between borrowed funds and capital being invested in securities and that it was impossible to believe that out of common hodgepodge of funds, the entire capital would have come into investment in shares. This indicates that the facts are not co-related in the decision by the CIT(A). First of all, Assessee has not invested in any securities, rather made investment in Mutual Funds. Further there are no borrowals for the investment in Mutual Funds as Assessee had its own fund received by way of settlement amount from other group companies which has a direct nexus with the Mutual Funds Investments. The only unsecured loan received was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in its support.The AO observed that there was no details of construction in the vouchers,that nobody had signed the vouchers.He directed the assessee to furnish the current address and confirmation from the persons who had carried out the preparing job. As per the AO,the assessee did not file any explanation in that regard. Accordingly, he made an addition of ₹ 7.78 lakhs to the income of the assessee. 8. During the appellate proceedings,before the FAA, the assessee did not file confirmation from the parties nor did it provide the current addresses of the persons carrying out repairing work.He observed that the address of the repairer was of Delhi whereas the PAN belonged to Mumbai. Considering these facts he held that the AO were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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