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TMI Blog2021 (10) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... ers of the lower authorities on this issue. Second disallowance of administrative expenses under Rule 8D(2)(iii) assessee stated that the total expenditure claimed in the profit and loss account is only 87,596/- and disallowance at the most can be restricted to this amount only. When this was pointed out to the learned Sr. DR, he could not controvert the same. Hence, we direct the Assessing Officer to restrict the disallowance under Rule 8D(2)(iii) of the Rules at ₹ 87,596/-. This issue of assessee s appeal is partly allowed. - ITA No. 5760/Mum/2019 (Assessment Year 2015-16) - - - Dated:- 31-8-2021 - SRI MAHAVIR SINGH, VP AND SRI MANOJ KUMAR AGGARWAL, AM Appellant by: Shri Mahendra Gohel, AR Respondent by: Shri Bharat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... JT(A) is excessive, unreasonable and unwarranted. 1.3 It is submitted that the Learned CIT(A) and learned Assessing Officer erred in disallowing legitimate business / establishment expenditure and proportionate interest as expenditure directly relating to Dividend Income. 3. We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the assessee has earned exempt income in the form of dividend on mutual fund at ₹ 1,88,15,081/- under section 10(34) of the Act. The Assessing Officer made disallowance by invoking the provisions of section 14A of the Act read with Rule 8D of the Rules and thereby, disallowed interest expenses under Rule 8D(2)(ii) of the Rules at ₹ 20,47,215 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Counsel for the assessee stated that issue is squarely covered by the decision of Hon ble Bombay High Court in the case of CIT vs. HDFC Bank (2014) 366 ITR 505 (Bom). The learned DR could not controvert the above facts. Hence, we are of the view that once the assessee has own funds more than the investment, no disallowance under Rule 8D(2)(ii) of the Rules can be made unless and until the Assessing Officer has able to prove the direct nexus. Hence, we delete the disallowance and reverse the orders of the lower authorities on this issue. 6. Coming to the second disallowance of administrative expenses made by Assessing Officer and confirmed by CIT(A) amounting to ₹ 5,95,854/- under Rule 8D(2)(iii), the learned counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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