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TMI Blog2025 (1) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... ,310/-. The same was processed under section 143(1) of the Income-tax Act, 1961 (for short 'the Act'). The case was selected under CASS for complete scrutiny for the following reasons :- (i) Low receipt from house property in ITR as compared to rental receipts in 26As. (ii) Higher turnover reported in Service Tax Return as compared to ITR. (iii) Claim of Large Exempt income. 3. Accordingly, notices under section 143(2) and 142(1) of the Act were issued and served upon the assessee. The Assessing Officer, after verification of the record, has made two disallowances i.e. one relates to unexplained cash deposit and other relates to disallowance u/s 14A. 4. Before us, the assessee is in appeal raising grounds of appeal only against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities. In this regard, he brought to our notice page 36 of the paper book. Therefore, he submitted that assessee has not claimed any expenditure which warrants disallowance u/s 14A of the Act. 8. On the other hand, ld. DR for the Revenue relied on the orders of the authorities below. 9. Considered the rival submissions and material placed on record. We observed that assessee is an individual running a book shop as well as made investments in shares, debentures and also in partnership firm. From the records submitted before us, we observed that assessee has claimed the expenditure relating to running of the book shop and assessee has not claimed any other expenditure which gives an impression that the relevant expenditure relating to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsection (2) shall apply. The provisions of seciton14A(3) will come into play when there are expenditures incurred by the assessee relating to running of regular income as well as exempt income. As per the record brought on record, when there is no trace of any expenditure incurred by the assessee for earning the exempt income which are included in the expenditures claimed by the assessee. The presumption u/s 14A(3) can be brought in the cases of a company which is an artificial person which are run by the actual persons representing the artificial person. There are implied expenditures which are incurred for both kinds of income i.e. regular as well as exempt income. In the case of individuals, they are not claiming any expenditure for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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