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TMI Blog2017 (11) TMI 1627X X X X Extracts X X X X X X X X Extracts X X X X ..... MEMBER For Assessee : Shri V. Siva Kumar, AR For Revenue : Shri P.V. Subba Raju, DR O R D E R The only issue in this appeal by assessee against the order of Ld.CIT(A) dated 29-11-2016 is the confirmation of an amount of ₹ 6,35,829/- u/s. 14A r.w.s. 8D(iii) of the Income Tax Act [Act] on an exempt dividend income of ₹ 8,100/-. 2. Before adverting to the merits of the issue, it is to be noted that assessee was formerly known as Capital Fortunes Financial Services Ltd., (at the time of filing of return of income). The assessment was completed on that name. The appeal before the Ld.CIT(A) was filed on 09-03-2015 in the name of Quintessentials and Corp Services Pvt Ltd., after change of name (the actual date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Investments of ₹ 12.71 crores in the equity shares of MIs. Nagarjuna Construction Company Ltd., M/s. Amrithjal Ventures Pvt. Ltd., M/s. Capital Fortune Pvt. Ltd., and M/s. Intercontinental Infrastructural lid. During the year as per computation of Income, under Other Incomes , appellant has shown receipt of ₹ 3,61,980/-, which is termed as interest income. This is also reflected in Profit Loss Account. The assessee contended that none of the expenditures has any nexus to the Investment activity. This was not proved before me. I do not agree that no expenditure or efforts were spent to earn this Income. Returns/ Income may vary every year, hence has no relevance to the quantum of investment. Income is result of much thought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee had earned only a small amount of ₹ 8,100/- as dividend and claimed exemption. The AO took expenditure of ₹ 16.50 Lakhs for disallowing the amount. As seen from the P L A/c, the employee cost at ₹ 3 Lakhs and finance cost at 5.7 Lakhs were also considered. Finance cost is not for investment, as the AO gave a finding about Rule 8D(ii). The only expenditure incurred by Assessee is other expenditure at ₹ 7,79,500/- in Sch. 21. The details are as under: Particulars Figures as at the end of the Current Reporting Period Figures as at the end of the Previous Reporting Period (Rs. In Hundreds) (Rs. in Hundreds) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the rival contentions and perused the material available on record. It has not been disputed that the administration, expenses and books of account of investment division are separately carried out and maintained by the assessee. No infirmity has been found by the department in this behalf. One of the main issue is on whom lies the onus to establish nexus of available funds with free and taxable income. Similarly courts have held that a finding in objective terms about assessee working being unsatisfactory is to be recorded by AO in the order. Chandigarh Bench of the Tribunal in the case of Punjab State Co-op. Marketing Fed. Ltd. (supra) has held that in any case the disallowance u/s 14A cannot exceed tax free income of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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