9911796707
TMI Blog2011 (5) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 14A of the Income Tax Act has been wrongly worked out as per Rule 8D of the IT Rules. It is contended that the disallowance u/s 14A to the extent of ₹ 62,73,165/- is wrong and bad in law. Without prejudice it is contended that the disallowance u/s 14A is high and excessive. Provision of Section 14A is not applicable in the instant case." 3. On this issue Assessing Officer noted that during the year the assessee company has claimed dividend income of ₹ 3,88,06,395/- as exempted income u/s 10. But the Assessing Officer noted that assessee has not disallowed the proportionate management and administrative expenses attributable to the exempt income. Assessing Officer proceeded to disallow the proportionate amount u/s 14A a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not be applicable. However, the Hon'ble Mumbai High Court has held that the reasonable disallowance has to be made. Hence, we remit this issue to the files of the Assessing Officer to consider the same afresh and decide as per the law, in light of the above cited Hon'ble Mumbai High Court decision. Needless to add that the assessee should be given adequate opportunity of being heard. 7. The next issue raised reads as under:- "Both on law and on facts, the Assessing Officer has grossly erred in disallowing of ₹ 5,53,65,006/- towards unabsorbed engineering overheads, which were routine business expenditure. It is contended that similar nature of disallowance as per ground above in the past years have been allowed at the 1st A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintenance, in excess of the average percentage of the Corporation, are treated as unabsorbed and charged to revenue which has been claimed as a normal business expenditure. Upon assessee's appeal Ld. Commissioner of Income Tax (Appeals) carefully considered the submissions. He held as under:- "On careful consideration of the facts of the case, I find that the construction overheads for the year under appeal amounts to ₹ 1178.77 lacs. Out of this, ₹ 63.76 lacs was taken to repairs and maintenance, being 15% of the direct expenditure on repairs and maintenance. ₹ 531.36 lacs is stated to be capitalized to the respective asset in proportion to the respective capital cost and the balance ₹ 553.65 was charged to P&L a/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting ₹ 63.76 lacs to P&L a/c) is claimed as revenue expenditure. However, the claim is not substantiated by proper details and documents. As regards appellant's reliance on the appellate orders of earlier years, I find from the reading of these orders that the details in this regard, were not sought for. While granting the relief, the Ld. Commissioner of Income Tax (Appeals) has observed that there is neither any evidence nor any concrete finding as to how such overhead expenses was capital in nature. However, facts and circumstances are different for the year under appeal. In the present appeal, specific queries have been raised in this regard and the Assessing Officer has also examined the issue. The appellant has not given comments ..... X X X X Extracts X X X X X X X X Extracts X X X X
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