9911796707
Advanced Search 
TMI Blog2015 (10) TMI 2646X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,75,500/-. During the course of assessment proceedings, the Assessing Officer observed that the assessee had made investment to the tune of Rs. 67,50,41,000/- in the previous year. However, it has not shown any income on this except a dividend income of Rs. 23,16,000/-, which has been claimed as exempt under section 10(34) of the Income Tax Act, 1916 (in short 'the Act'). In view of the same, invoking the provisions of section 14A of the Act, disallowance of Rs. 84,00,560/- was made as per Rule 8D of the Income Tax Rules. 3. Before the learned CIT (Appeals), it was argued by the assessee that the investments as appearing in the balance sheet of the assessee have been made out of own funds, which is very much evident from the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... she was not convinced by the arguments put forth and heavy reliance on the case laws to advance its contention. She was of the considered opinion that the claim of the assessee cannot be accepted and consequently, the application of Rule 8D of the Income Tax Rules by the Assessing Officer to compute the expenses relating to earning of exempted income was upheld. However, on pointing out by the assessee that the disallowance made by the Assessing Officer of Rs. 84,00,560/- exceeded the amount of dividend income earned, she restricted the disallowance to the extent of the exempt income of Rs. 23,16,000/-. 4. Aggrieved by the said order, now the assessee has come up in appeal before us on the disallowance sustained by the learned CIT (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the Statute, the Assessing Officer is bound by it and deduction has to be made as per Rule 8D of the Income Tax Rules only. 7. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. It is seen from the perusal of the balance sheet, Profit & Loss Account and the schedules annexed thereto (Paper Book Page-1) that the investments in earlier year was of Rs. 63,30,41,000/-, while it is to an amount of Rs. 67,50,41,000/- at the end of the current year, the increase of Rs. 4,20,00,000/- is on account of transfer of share application money to share allotment, as is evident from page 4 of the Paper Book. As such, it is quite evident that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Bright Enterprises Pvt. Ltd. Vs. CIT, ITA 224 of 2013 (O&M) dated 27.7.2015, we hold that on the facts and circumstances, no disallowance on account of interest expenditure under section 14A of the Act can be made in this case. 9. As regards the administrative expenses part of the disallowance under section 14A of the Act, the assessee has all along been contending before the lower authorities that there was no need for it to incur any such expenditure and it has in fact incurred no such expenditure, the Assessing Officer straightaway, without commenting on such claim of the assessee, embarked upon computation under Rule 8D of the Income Tax Rules for the purpose of section 14A of the Act. She has nowhere recorded her satisfac ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
