9911796707
TMI Blog2023 (1) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... hereas suo motu assessee has not made any disallowance under section 14A read with Rule 8D. In the course of assessment proceedings the AO had called upon the assessee to explain the reason for not making any disallowance. Though, the assessee filed its explanation, however, the Assessing Officer after recording his satisfaction regarding claim of the assessee has proceeded to make the disallowance. Therefore, he has complied with the provisions of Section 14A(2) of the Act. We uphold the disallowance made under Rule 8D(2)(iii). This ground is partly allowed. TDS u/s 195 - Disallowance u/s 40(a)(i) - assessee had paid an amount to some non-residents towards patent charges - Commissioner(Appeals) upheld the disallowance made by AO th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has challenged the disallowance of expenditure under section 14A of the Income Tax Act, 1961. 4. Briefly the facts are that the assessee is a resident corporate entity. For the assessment year under dispute the assessee filed its return of income on 16.10.2016 declaring income of Rs.2,29,26,410/-. In course of assessment proceedings the Assessing Officer noticed that in the year under consideration, though, the assessee had earned exempt income by way of dividend, however, it has not disallowed any expenditure under section 14A read with Rule 8D. He, therefore, called upon the assessee to explain why disallowance should not be made in terms with Rule 8D. Though, the assessee objected to the proposed disallowance, however, rejecting th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form of reserve and surplus to the tune of Rs.40 crores was available. Though, this factual claim of the assessee was not controverted by the departmental authorities, at the same time, disallowance on account of interest expenditure was made. This, in our view, is unacceptable. When the assessee has factually demonstrated that it had sufficient interest free fund available with it to take care of the investment, as per the settled legal principles, no disallowance of interest expenditure could have been made under Rule 8D(2)(ii). Accordingly, we delete the disallowance of interest expenditure made under Rule 8D(2)(ii). As regards the disallowance of administrative expenditure under Rule 8D(2)(iii), undisputedly in the year under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee contested the aforesaid disallowance before Learned Commissioner(Appeals). However, Learned Commissioner(Appeals) upheld the disallowance made by the Assessing Officer, though, by treating the payment made as Fee for Technical Services (FTS) under section 9(i)(vii)(b) of the Act. 12. Before us Learned Counsel appearing for assessee submitted that the assessee exports certain products manufactured by it to foreign countries. He submitted, for protecting the products assessee has patented them for which the assessee had to renew the patent from time to time. He submitted, the payments made to the foreign parties are for patent renewal fee, hence, cannot be treated as either Royalty or FTS. He submitted, since the departmental authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
