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TMI Blog2021 (9) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... n 14A read with Rule 8D of Income Tax Rules - As because such benefit was extended by the AO in the assessment framed under Section 143(3) for the Assessment Year 2007-08 which was not disputed by the assessee. There being no change in the facts and circumstances or the provisions of law, in our considered view the principles of consistency should be followed by the Revenue - we direct the authorities below to extend the benefit of the assessee on account of diminution in the value of investments while working out the disallowance to be made under the provisions of Section 14A read with Rule 8D of Income Tax Rules - Appeal of the assessee is partly allowed. - ITA No.1350/AHD/2019 (Asstt. Year: 2015-2016) - - - Dated:- 4-8-2021 - SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER Assessee by: Shri M.J. Shah, A.R Revenue by: Shri S.S. Shukla, Sr.D.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-8, Ahmedabad, arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee against such income has made the disallowance of ₹ 5,29,512.00 under the provision of section 14A of the Act. However, the AO during the assessment proceedings found that the disallowance has not been made by the assessee in pursuance of Rule 8D of the Income-Tax Rules. Accordingly, the AO invoked the same and worked out disallowance as under: Sr.No. Particulars Amount 1. Direct Expenditure 167718 2. Interest Expenses Nil 3. Administrative Expenses 1154191 4.1 In view of the above, the AO made the disallowance of ₹ 7,92,784/- (13,21,909.00-5,29,125.00) after adjusting the amount already disallowed by the assessee. 5. Aggrieved assessee preferred an appeal to the Ld. CIT(A), who confirmed the order of the AO. 6. Being aggrieved by the order of Ld. CIT(A) the assessee is in appeal before us . 7. The Ld. AR before us submitted that this Tribunal in the own case of the assessee (group case) in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tify based on the documentary evidence that the expenditure claimed by it were not incurred in connection with the exempted income. In the case on hand, the assessee failed to make any submission about the same. As such the onus shifts from the assessee upon the AO when he makes the submission to the AO with the documentary evidence that it has not incurred any expenditure in connection with the exempted income. But, we find that the assessee has not made any submission except disallowing the expenses on estimation basis. As such we find that the AO has derived the satisfaction by recording in the assessment order as detailed under: This shows that the assessee itself has admitted that some expenditure has been incurred by the assessee, which has been debited in the profit and loss account, for earning the exempted income. However, the working of disallowance made by the assessee is not correct. In this case, the Assessing Officer does not have to prove the nexus of such expenditure with the exempt income as the assessee itself has admitted of having spent some expenditure for earning of exempted income by making a lump sum disallowance, which was debited in the profit an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r earning exempt income is not correct, then the same has to be worked out as per Rule 8D of the IT Rules and the AO has worked out the disallowance on the basis of Rule 8D only. We, therefore, do not find any reason to interfere in the order of the learned CIT(A). 9. In the result, the appeal of the assessee is dismissed. 20. It is also important to note that the Ld. AR at the time of hearing cited various orders/judgments as mentioned above, but in our considered view these are distinguishable from the present facts of the case, more particularly, in the existent situation when the ITAT in the own case of assessee, as discussed above, has decided the issue against it (the assessee). Therefore, we are not incline to recapitulate to all such citations referred by the Ld. AR for the assessee. 21. However, we find force in the argument of the Learned AR for the assessee that investments which have been made through the involvement of the PMS providers should be ignored while working out the disallowance of the expenses under Rule 8D of Income Tax Rule. It is because such investments were made on the advice of the PMS and for this purpose PMS was compensated by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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