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TMI Blog2019 (2) TMI 1932X X X X Extracts X X X X X X X X Extracts X X X X ..... a settled legal proposition in matters of principles of provisions to section 40A(2)(b) Assessing Officer is under obligation to prove that the claims made by the assessee are unacceptable. This is a case where the assessee demonstrated the primary onus by furnishing the basic facts. Disallowance u/s 14A read with Rule 8D(2)(ii) - AO noted that the assessee earned exempt income by way of dividend and PPF interest - CIT(A) directed the Assessing Officer to delete the disallowances and rework the same - HELD THAT:- We find the CIT(A) merely directed to the Assessing Officer to delete the addition and rework the disallowance. In our view, the said direction is fair and reasonable and it does not call for any interference. It is not brought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, the disallowance be restricted to a reasonable amount. 4. In the facts and circumstances of the case, the Commissioner of Income Tax (A) VI, has erred in law as well as in fact, in confirming the addition u/s 14A for ₹ 55,386/- even when no expenses are actually incurred to earn the said exempted income. 5. In the facts and circumstances of the case, the Commissioner of Income Tax (A) VI, has erred in law as well as in fact, in confirming the disallowance of ₹ 2,11,989/- being interest paid on unsecured loans treating the same as unrelated to business. 6. Your petitioner prays further, if required, to add, amend, modify or withdraw any other document, evidence or grounds of appeal." 3. Briefly stated the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 9.90 lakhs, debited to the Profit and Loss Account, invoking the provisions of section 40A(2)(b) of the Act. The CIT(A) disallowed the entire claim under the said provisions. However, neither of the officials have gathered any comparable cases of such transaction of payment of commission in order, to demonstrate that the payments made by the assessee to the firm, where the assessee's father is a partner, is excessive or unreasonable. These expressions are used in the provisions of section 40A(2)(b) of the Act. 7. Before us, ld. Counsel demonstrated that earlier, the firm rendered the commission linked services before the said business was diverted to the assessee. The payment of commission is essential feature in this line of business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-. During the assessment proceedings, the Assessing Officer noted that the assessee earned exempt income by way of dividend and PPF interest amounting to ₹ 55,293/-. The CIT(A) directed the Assessing Officer to delete the disallowances and rework the same. The contents of para 6.1 to 6.2 of the order of the CIT(A) are relevant in this regard. For the sake of completeness, the contents of para 6.2 are relevant to extract and the same is as under :- "6.2 On verification, it is seen that the investment in the PF has also been considered by the AO while calculating the disallowance u/s 14A. The PF investments are made from the taxable income to claim deduction u/s. 80C. As these investments are made out of the income, the same cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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