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TMI Blog2016 (12) TMI 1791X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of disallowance of deductions, and none other much less the learned CIT(Appeals) can substitute his opinion for that of the Assessing Officer to validate otherwise invalid order of Assessing Officer. With this view of the matter we hold that the order of the authorities cannot be sustained and the additions made on account of invocation of Section 14A of the Act read with Rule 8D of the Rules shall be deleted. We accordingly allow the appeal of assessee. - I.T.A. No. 2500/Kol/2013 - - - Dated:- 14-12-2016 - Shri P. M. Jagtap, AM AND Shri K. Narasimha Chary, JM For the Appellant : Shri Girish Sharma, FCA, AR For the Respondent : Shri Amitabha Choudhury, JCIT ORDER Per Shri K. Nar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the learned CIT(Appeals), by way of the impugned order confirmed the addition made under section 14A of the Act read with Rule 8D of the Rules to a tune of ₹ 11,17,890/- and after deducting ₹ 8,050/- disallowed by the assessee, it came to ₹ 11,09,840/-. 4. Aggrieved by the said impugned order, the assessee carried the matter in this appeal on the following grounds: 1. That on the facts and circumstances of the case Ld. Commissioner (Appeals) erred in disallowing ₹ 11,17,890/- as per Rule 8D read with Section 14A of the Income Tax Act, 1961. 2. That the Appellant craves leave to add, alter, amend, delete, substitute any of the grounds and/or take additional ground/s before or at any ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en incorporated by Income Tax (%th amendment) Rules, 2008. The assessee submit reply stating That we have offered ₹ 8,050/- in our computation being the amount of expense related to dividend and disallowed u/s 14A. In our opinion no other expenses can be categorized with earning of dividend. The reply of the assessee is not accepted. The Hon ble ITAT (Spl. Bench) Mumbai has already decided in the case of M/s Daga Capital that application of Rule 8D is retrospective in nature. The disallowance u/s 14A as per Rule 8D is as follows: 7. It was argued before the Learned CIT (Appeals), as could be seen from his order at page No 3, that while framing the Assessment order the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer, having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which does not form part of the total income under this Act. Rule 8D(1) of the Rules stipulates that for determining amount of expenditure in relation to income not includible in total income, where the Assessing Officer, having regard to the accounts of the assessee of a previous year, is not satisfied with (a) the correctness of the claim of expenditure made by the assessee; or (b) the claim made by the assessee that no expenditure has been incurred, in relation to income which does not form part of the total income under the Act for such previous year, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No 1809/Kol/2012: While rejecting the claim of the assessee with regard to expenditure or no expenditure, as the case may be, in relation to exempted income, the AO has to indicate cogent reasons for the same. From the facts of the present case, it is noticed that the AO has not considered the claim of the assessee and straight away embarked upon computing disallowance under Rule 8D of the Rules on presuming the average value of investment at % of the total value. In view of the above and respectfully following the coordinate bench decision in the case of J.K. Investors (Bombay) Ltd., supra, we uphold the order of CIT (A) 11. When law invests a power in an authority subject to his satisfaction as to the existence of c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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