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TMI Blog2017 (7) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... as to follow the consequences stated in the statute. It means that even in a case where no expenditure is stated to have been incurred, the assessing authority has to apply Rule 8D. As the statutory presumption substitutes the requirement of factual evidence, the question of enquiry does not arise. Therefore, we are unable to agree with the argument of the learned A.R. - Appeal of the assessee is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... f co-ordinate Bench of Mumbai Tribunal in the case of Justice Sam P. Bharucha Vs. ACIT in ITA No.3889/Mum/2011 dated 25th July 2012 wherein held that:- 5.1 The expenditure incurred in relation to the income which does not form part of total income has to be disallowed. However, it should be proximate relationship between the expenditure and the income, which does not form part of total income. Once such proximity relationships exist, the disallowance is to be effected. In case the assessee had claimed that ho expenditure has been incurred for earning the exempt income, it was for the assessing officer to determine as to whether the assessee had incurred any expenditure in relation to income which did not form part of total income and if s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or such expenditure is incurred for inseparable and indivisible activities comprising professional as well as the activities on which is exempt income has been earned by the assessee, then in the absence of any such instance of expenditure, finding of Assessing Officer or any material to show that the expenditure incurred and claimed by the assessee against the taxable income has any relation for earning the exempt income, the provisions of section 14A cannot be applied. 5.3 In the case of silicone, permissible Lal versus ACIT supra this tribunal has considered and decided an identical issue in para 4 as under: "4. After hearing the assessee in person and arguments of the learned D.R. we are of the opinion That no disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of lower authorities. 6. We considered the arguments of both the sides in detail. Sec.14A(1) declares the law that the expenditure incurred by the assessee in relation to the income which does not form part of the total income under the Act shall not be allowed as a deduction in computing the taxable income of the assessee. Sec.14A(2) provides for determining the quantum of such expenditure which shall not be allowed as a deduction. That is the machinery provision as far as sec.14A is concerned. In that provision, it has been provided that if the Assessing Officer is not satisfied with the correctness of the computations made by an assessee, he shall compute the quantum in accordance with the method that may be prescribed. For this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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