Tribunal held that the Assessing Officer had not expressed any satisfaction that the assessee had incurred certain expenditure for earning the dividend income. Section\u00a014A\u00a0of the\u00a0Income-tax Act, 1961\u00a0postulates the disallowance of expenditure incurred for earning the exempt income which does not form part of the total income of the assessee. No claim had been made in respect of dividend income. The formula given in rule\u00a08D\u00a0did not recognise the actual expenditure incurred by the assessee but it calculates the disallowance at 0.5 per cent. of the average investment. Therefore, this computation of disallowance could not override the actual expenditure attributable for earning the exempt income. Accordingly, the disallowance made by the Assessing Officer of Rs. 10,81,553 under section\u00a014A\u00a0by applying rule\u00a08D(2)\u00a0was deleted. Tribunal also held that \u00a0\u00a0the period during which the lockdown was in force shall stand excluded for the purpose of working out the time limit for pronouncement of orders, as envisaged in rule\u00a034(5)\u00a0of the\u00a0Income-tax (Appellate Tribunal) Rules, 1963\u00a0.( AY.2010-11)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 14A : Disallowance of expenditure – Exempt income \u2013 Not recording of satisfaction \u2013 No disallowance could be made- Period during which the lockdown was in force shall stand excluded for the purpose of working out the time limit for pronouncement of orders, as envisaged in rule 34(5) of the Income-tax (Appellate Tribunal) Rules, 1963 . .[ . S.254(1), R.8D ]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-14030","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-3Ei","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/14030","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=14030"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/14030\/revisions"}],"predecessor-version":[{"id":14031,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/14030\/revisions\/14031"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=14030"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=14030"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=14030"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}