9911796707
TMI Blog2023 (8) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... rative expenses claimed in the profit and loss account, then disallowance should be restricted to that amount only as disallowance cannot be made more than the expenditure claimed against composite activities of earning exempt and taxable income. In the case of the head administrative expenses administrative expenses, the assessee has claimed amount of rupees 2139.99 lakhs which being more than the disallowance under Rule 8d(2)(iii) of ₹14,58,76,907/- and therefore we do not find any absurdity in disallowance which has been computed invoking rule 8D of rules. As before us, assessee has now admitted to have incurred some expenses toward earning of the exempted income but no such disallowance has been computed by the assessee while f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equity shares and mutual funds and claimed the entire dividend income as exempt. However, the assessee did not make any suo moto disallowance out of expenses in profit and loss account related to exempted income. It was claimed by the assessee that investment in subsidiary or group companies was made with the object of controlling stake in the subsidiary company and not for earning dividend income. The Assessing Officer recorded the dissatisfaction on the claim of the assessee of incurring no expenses for earning exempted income and accordingly invoked Rule 8D of the Income-tax Rules, 1962 (the Rules) and made disallowance of Rs. 14,58,76,907/- computing as under: Rule 8D(2)(ii) 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... states the obvious, and would in any case warrant a disallowance, i.e., even in the absence of the rule. Similarly, the part of the rule prescribing the ratio in respect of indirect expenditure (rule 8D(2) (ini)) cannot be altered on account of (say) hardship. This is as the rule prescribes the same as the ratio of indirect expenditure required to support an investment. In fact, the same, at 0.5%, is very nominal, recommending itself to an easy acceptance, eschewing the charge of being harsh. In view of the above, no fault can be found with the action of the Ld. AO in making disallowance under Rule 8D(2) (i). Hence, disallowance made under Rule 8D(2) (i) at Rs. 14,58,76,907/-, being 0.5% of the average value of investment is CONFIRMED ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Rules, 1962 ( In short the Rules) and therefore, assessee cannot take the plea that it came to the knowledge of the assessee only on the 16.08.2022 while going through the e-filing account. He submitted that it is the duty of the assessee to verify its e-filing account. He submitted that the assessee is always intimated through SMS regarding uploading of the order on the e-filing account therefore the assessee cannot argue that the order of Ld. CIT(A) came to the knowledge only on 16.08.2022. According to him, the delay in filing the appeal is due to carelessness or negligence on the part of the assessee. 6. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 21, 968.86 lakhs/total income of ₹ 29, 122.67 lakhs). Based on the above ratio, the learned counsel submitted that disallowance should be restricted to 75.44% of rupees 246.78 lakhs i.e. 186. 17 lakhs, being the administrative expenses for earning dividend income. 8. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the assessee earned dividend income of Rs. Rs. 2,19,68,85,793/- from investment in equity shares and mutual funds and claimed the entire dividend income as exempt, but did not make any suo moto disallowance before the lower authorities. The Assessing Officer recorded dissatisfaction as to the claim of the assessee and invoked Rule 8D o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absurdity in disallowance which has been computed invoking rule 8D of rules. 8.2 Before us, the Ld. Counsel of the assessee has now admitted to have incurred some expenses toward earning of the exempted income but no such disallowance has been computed by the assessee while filing return of income. In view of the fresh claim of disallowance under section 14A of the Act for earning exempted income, we feel it appropriate to restore the issue of disallowance under section 14A of the Act back to the file of the learned Assessing Officer for examining the correctness of the claim of the assessee and deciding the issue in dispute in accordance with law. The ground of appeal of the assessee is accordingly allowed for statistical purposes. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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