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TMI Blog2015 (9) TMI 1664X X X X Extracts X X X X X X X X Extracts X X X X ..... owhere the AO has given his satisfaction having regard to the accounts of the assessee about the claim of the assessee, that no expenditure has been incurred, which can be said to be attributable for making investment capable of earring exempt income or has yielded the exempt income is false or incorrect. Accordingly, on these facts we hold that no disallowance u/s 14A is called for - ITA No. : 2706/Mum/2013 - - - Dated:- 28-9-2015 - SHRI G S PANNU, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBERITA For The Appellant : Kiran Mehta For The Respondent : Shri Akhilendra Yadav ORDER PER AMIT SHUKLA, AM: The aforesaid appeal has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t some amount withdrawn, in recent past. Copy of Bank book for the period 2005 is also attached where in the source of funds and investment is evidenced. Thus the provisions of section 14A of the Income Tax Act does not apply to the company . 3. However, the Ld. AO rejected the assessee s contention after referring to the decision of ITAT Mumbai Bench in the case of Mr. Dharamsingh M Popat, M/s Mulla and Mulla Craifie Blunt Craifie Blunt Caroe, vs ACIT 11(2) ITA No. 7534/Mum/2004 wherein it was held that even if the investment has been made in the partnership firm will not make difference as it is separate entity and profit derived by the partners in their hand is exempt and therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business purpose of the assessee and nothing can be said to be attributable for the earning of the exempt income. As an alternative he submitted that at the most, out of salary expenses and that too when there is no salary of Directors, some token disallowance could be made. 6. On the other hand Ld. DR, strongly relied upon the order of the CIT(A) and AO and submitted that once assessee has made investments, which are capable of earning exempt income then provisions of section 14A gets triggered and disallowance has to be made. Since the matter pertains to AY 2009-10, therefore, provisions of Rule 8D has to be applied for working of the disallowance. 7. We have heard the rival submissions and also peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SCHEDULE N ADMINISTRATIVE EXPENSES Bank Charges Commission 4,19,825 Clearing and forwarding charges 15,133 Conveyance Travelling 6,296 Electricity Charges 74,357 Export Airfreight Charges 13,478 Jewellery Block Policy Insurance 75,121 Exchange Rate Difference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts of the assessee but also looking to the nature of expenditure incurred and nature of investments standing in the Balance sheet, it cannot be held that any disallowance u/s 14A is called for. Nowhere the AO has given his satisfaction having regard to the accounts of the assessee about the claim of the assessee, that no expenditure has been incurred, which can be said to be attributable for making investment capable of earring exempt income or has yielded the exempt income is false or incorrect. Accordingly, on these facts we hold that no disallowance u/s 14A is called for. The other limbs of the argument of the Ld. Counsel have become purely academic, hence not adjudicated upon. 8. In the result, appeal 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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