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TMI Blog2016 (4) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... .2009 assessing the total income of Rs. 166,20,10,410/-. Feeling aggrieved, the assessee filed an appeal before learned Commissioner of Income Tax (Appeal) 8, Mumbai [hereinafter referred to as "the CIT(A)"], who passed the order dated 22.03.2010 in question. Since both the parties were not satisfied with the finding of learned CIT(A) therefore both the appeals have been filed. 3. The assessee has taken the following grounds:- "1. The learned CIT(A) has erred in upholding the disallowance of Rs. 16,86,893/- representing expenditure incurred by the Appellant on leasehold improvements as being capital in nature. 2. The learned CIT(A) has erred in upholding the addition of Rs. 69,883/- on account of advances written off by the Appellant eventhough the advance was given for the purpose of business of the Appellant in the normal course of its activities. 3. (a) The learned CIT(A) erred in confirming the disallowance made under section 14A read with Rule 8D. (b) Without prejudice the learned CIT(A) has erred in disregarding the Appellant's submissions regarding working of estimated expenses of Rs. 50,000/- and directing the Assessing Officer to make disallowance as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. On the facts and in the circumstances of the case and in law, the Ld.CIT(A)- 3, Mumbai has erred in directing the Assessing Officer to delete the disallowance made u/sl4A r.w.Rule8D of the Act with respect to interest expense, ignoring the fact that the assessee earned exempted income and incurred direct and indirect expenses to earn the said exempted income and the Assessing Officer was rule bound by Rule 8D(2)(ii) of the I T Rules, 1962,to calculate the disallowance taking into account interest expense also." ITA No. :- 4818/M/10(Assessee's Appeal):- ISSUE NO . 1&2:- 5. The issue number 1 and 2 raised by the assessee are not pressed by the learned representative of the assessee due to smallness of amount involved, therefore, these grounds are dismissed as not pressed. ISSUE NO. 3:- 6. The learned representative of the assessee has argued that the learned CIT(A) has erred in confirming the disallowance u/s 14A read with Rule 8D of the Income Tax Act, 1961( in short "the Act"). The assessee has taken the various grounds such as he has earned the exempt income from the investment of his own funds and the long term capital gain is not required to be considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e which has been incurred in relation to income which does not form part of the total income under the Act. The AO must adopt a reasonable basis or method consistent with all the relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record. (vii) The proceedings for asst. yr. 2002-03 shall stand remanded back to the A.O. The AO shall determine as to whether the assessee has incurred any expenditure (direct or indirect) in relation to dividend income / income from mutual funds which does not form part of the total income as contemplated under s. 14A. The AO can adopt a reasonable basis for effecting the apportionment. While making that determination, the AO shall provide a reasonable opportunity to the assessee of producing its accounts and relevant or germane material having a bearing on the facts and circumstances of the case. In view of the finding of the Hon'ble Bombay High Court no doubt the expenditure incurred to earn the exempt income is liable to be disallowed on reasonable basis by providing the reasonable opportunity to the assessee in accordance with the law specifically in view of the observa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence, what is required to be seen is as to whether to aggregate amount of rent plus reimbursements compares well with the earlier years payment. If it does not compare well, then it is the duty of the assessee to justify the payment. In view of the above, this issue required fresh examination at the end of Assessing Officer. Accordingly we set aside the order of learned CIT(A) on this issue and restore this issue to the file of Assessing Officer for fresh examination. ITA No. :- 4675/M/10 (Revenue's Appeal) :- ISSUE NO. 1:- 8. The first point which has been raised by the revenue is in connection with the allowance of the expenditure incurred upon the advertisement and promotion at Rs. 57,78,45,583/-. The learned Departmental Representative has claimed that the said expenditure incurred for advertisement and promotion has been allowed by the learned CIT(A) wrongly and illegally therefore the same is not required to be allowed in the interest of justice. However, on the other hand learned representative of the assessee has refuted the said contentions. Keeping in view of the argument advanced by the learned representative of the parties and perusing the record, it is ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ib) 712 (Mumbai)(SB) and by the Hon'ble High Court of Delhi while the deciding the case of CIT Vs. BSES Rajdhani Powers Ltd. The plea which has been taken by the revenue is that the depreciation which has been allowed @ 60% and the value of the paper and other materials, is higher but the matter has been considered by the learned CIT(A) who allowed the same on the basis of the assessment held in the year of 2003-04, 2004-05 and 2005-06. We find no reason to interfere with the order passed by the learned CIT(A). Hence, the plea of the revenue is hereby declined. ISSUE NO. 4:- 11. While raising the issue no.4 the revenue has taken the plea with regard to disallowance made u/s 14A read with Rule 8D. While, objecting the exempt income and incurring the expenditure thereon. As a matter of controversy, has already been adjudicated, while deciding the appeal filed by the assessee which certain directions which has been given to the A.O. with regard to the implementation of provision containing section 14A of the Act and in view of judgment passed by the Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT 2010(43 DTR 177), Bombay High Court. Therefore, there is no need to decide the matter aga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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