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TMI Blog2018 (6) TMI 1538X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years 2011-12 & 2012-13 respectively both passed U/s.250(6) r.w.s. 143(3) of the Act. The assessee has also raised cross objections against the orders of the Ld.CIT(A) for both the relevant assessment years. 2. Revenue's Appeal:- Assessment year 2011-12 & 2012-13 The Revenue has raised two identical grounds in its appeals however the crux of the issue is that the Ld.CIT(A) has erred in restricting the disallowance made by the Ld.AO by invoking the provisions of Section 14A r.w.r. 8D of the Rules to the extent of exempt income earned by the assessee. 3. Assessee's Cross Objection:- A) Assessment year 2011-12:- The assessee has raised five grounds in its cross objection for the assessment year 2011-12 however the crux of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12-13 respectively. Finally assessment orders were passed U/s.143(3) of the Act for both the assessment years 2011-12 & 2012-13 on 24.03.2014 & 26.03.2015 respectively, wherein the Ld.AO made several additions. 5. Revenue's Appeal - Assessment years 2011-12 & 2012-13:- Disallowance of expenditure incurred towards earning exempt income invoking the provisions of Section 14A of the Act:- During the course of scrutiny assessment proceedings in both the assessment years it was observed by the LD.AO that the assessee had made investment in shares earning dividend income which is exempt from tax. For both the assessment years, the assessee did not compute the disallowance of expenditure incurred for earning exempt income. Therefore the Ld.AO i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed as deduction from the taxable profit of the assessee company. As per the provisions of the Act, the assessee is bound to compute the actual expenses incurred by it towards investment that would earn exempt income and disallow the same. In the case of the assessee, such computation is neither made nor the expenditure towards earning exempt disallowed by the assessee. Therefore we are of the view that the Ld.AO was right in his realm to invoke the provisions of Section 14A r.w.r.8D of the Rules. Further it is pertinent to mention that there is no correlation between the dividend income earned by the assessee and the expenditure incurred by the assessee towards investment that earns exempt income. For example:- during a particular yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised by the assessee in its cross objection for the assessment year 2011-12 does not survive. Assessment year 2012-13 : 7. Ground No. 3(B)(i): Partly confirming the addition made by the Ld.AO by invoking the provisions of Section 14A of the Act:- Since we have remitted back the issue of disallowance U/s.14A r.w.r.8D of the Rules with certain directions herein above in the Revenue's appeal, the ground raised by the assessee in its cross objection for the assessment year 2012-13 also does not survive. 8. Ground Nos.3 (B) (ii) to (v) :- The Ld.CIT(A) had confirmed the order of the Ld.AO with respect to addition on account of unsecured loans and unexplained sundry creditors because the assessee could not discharge its onus with respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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