9911796707
TMI Blog2018 (3) TMI 1398X X X X Extracts X X X X X X X X Extracts X X X X ..... 250 of the Income Tax Act dated 29/12/2015 by the learned CIT (Appeals)-2 is erroneous in nature as he has confirmed the order of Ld. AO who made additions u/s 14A in the total income of the assessee company. 2) That the addition u/s 14A of the Act was made by making is allowance of Rs. 3,71,410/- which is quite unjustified and is bad in law. 3) That the learned CIT (A) has erred in law by affirming the is allowance made by AO amounting to Rs. 3,71,410/- over and above the disallowance already made by the assessee company under Section 14A of the Act, ignoring the basic fact that no expenses had been incurred for earning exempt income." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee company has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. AO noticed from memorandum of association of the assessee company that its main object is real estate promoters, developers and project management association including civil, mechanical, electrical etc. and even in the tax audit report, the nature of business has been shown as builder and property developers, but no building construction activities have been recorded in the P&L account. It is also not in dispute that under the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) of r. 8D of the Rules." 8. In the instant case, the AO has not recorded any dissatisfaction as to the claim of the assessee that no expenditure was incurred to earn exempt income as per its account and in such circumstances, the computation under sub-rule (2) of Rule 8D cannot be made. In this case, undisputedly, the assessee has earned dividend income to the tune of Rs. 200/- but disallowance u/s 14A read with Rule 8D has been made to the tune of Rs. 3,71,410/-. 9. Hon'ble Delhi High Court in Joint Investments (P.) Ltd. (supra) case also decided the identical issue that disallowance u/s 14A is to be made only to the extent of disallowing expenditure incurred by the assessee in relation to the tax exempt income. So, we are of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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