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TMI Blog2014 (4) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... ombinedly and disposed of in this consolidated order. Appeal wise and ground wise adjudication is given in the following paragraphs. 2. At the outset, Shri Yogesh A Thar, Ld Counsel for the assessee brought our attention to the appeal for the assessment year 2008-2009, and mentioned that ground no.1 raised in that appeal, which is relating to reopening u/s 147 of the Act, is pressed. After hearing the Ld DR in this regard, the said ground no.1 of the appeal ITA No.5146/M/2012 (AY: 2008-2009) is dismissed as not pressed. Ground no.2 in the said appeal, which is exactly identical to the solitary ground raised by the assessee for the AY 2009-2010 and the only difference is in figures, is raised without prejudice to ground no.1, which reads a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue Authorities as well as the cited decision of the Tribunal in the case of M/s. Jayshree Petrochemicals Pvt. Ltd (supra). On perusal of the said order of the Tribunal, we find para 4 to 7 of the Tribunal's order (supra) are relevant and the same read as under: "4. We have considered the rival submissions as well as relevant material on record. The Assessing Officer has worked out the disallowance u/s 14A by considering the direct expenditure as well as indirect expenditure. The direct expenditure has been worked out by the A.O as under: "The assessee has also incurred following expenses which are directly connected with the earning of exempted income. a. Delivery charges Rs. 25,641 b. D mat charges Rs. 2,15,411 c. Tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of Section 14A there should be proximate cause for disallowance which has relationship with the tax exempt income. The apportionment of expenditure is needed when expenditure is incurred in relation to composite/indivisible business which results the earning of both taxable and non-taxable income. Therefore in order to disallowed the expenditure u/s 14A there must be a live nexus between the expenditure incurred and the income not forming part of the total income. In the case in hand the details of direct and indirect expenses booked by the assessee to the profit and loss account are given in schedule 14 at page no. 6 of the paper book as under: 5. Schedule No. 14 Selling & Administrative Charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme and purpose of Section 14A is to disallow the claim of the expenses incurred in relation to earning the income not forming part of the total income. Therefore, the disallowance of expenditure is always in relation to the claim of expenditure and it cannot be more than the claim itself. An identical issue has been considered by the Delhi Benches of the Tribunal in case of Gillette Group India Pvt. Ltd. Vs ACIT and concluded in para 6 as under: "6. From the above, it is evident that as per sub-section (1) of Section 14A, no deduction is to be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of total income. Sub-section (2) of Section 14A provides the procedure for determinatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. Vs ACIT (supra). Moreover, in the present case, there are certain expenditures debited to the P&L Account, which are prima facie unconnected to the exempt income. Such expenses should also need to be exempted. Considering the above order of the Tribunal, we are of the opinion that the matter should be remanded to the files of the AO to examine the expenses debited to the P&L Account and exclude the unconnected expenses for the purpose of quantifying the disallowance u/s 14A of the Act. Accordingly, we remit the matter to the file of the AO. He shall examine if the Ld AR's claim of disallowance of Rs. 66,404/- (for the AY 2008-09) and Rs. 71,773/- (for the AY 2009-2010). AO shall adjudicate the issue afresh in accordance with the set p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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