M. Junction Services Ltd. v. (2018) 65 ITR 40 (SN) (Kol) (Trib)

S. 14A : Disallowance of expenditure – Exempt income – Assessing Officer not giving cogent reason for rejecting suo motu disallowance made by Assessee — Assessee need not maintain separate books for expenses incurred in earning exempt income —No disallowances can be made . [ R.8D ]

Allowing the appeal of the assessee the Tribunal held that ;  the Assessing Officer had not given any cogent reason as to why he was not satisfied with the suo motu disallowance made by the assessee. The Assessing Officer’s comment that the assessee did not maintain separate books of account for the expenses incurred in relation to earning of income not includible in the total income was tantamount to the Assessing Officer being of the opinion that the assessee should maintain separate books for this purpose. This was not required in terms of law. The Assessing Officer committed an error in assuming so. Thus, the disallowance made by the Assessing Officer under rule 8D was deleted. Followed ,Maxopp Investment Ltd. v. CIT (2018) 402 ITR 640 (SC)  ( AY.2011-12)