ARINDAM SINHA,J. - (1.) The Revenue is aggrieved by order dated 14th August, 2015 passed by the Income Tax Appellate Tribunal "C" Bench, Kolkata in ITA nos.1989/KOL/2013 and 1010/KOL/2013 respectively pertaining to assessment years 2008-09 and 2009-10.
(2.) Mr. Dudhoria, learned Advocate appeared on behalf of the Revenue and pressed the appeal for admission on only one of the suggested substantial questions of law as is set out below: "Whether on the facts and in the circumstances of the case the Learned Income Tax Appellate Tribunal, 'C' Bench Kolkata erred in law in upholding the order of C.I.T.(Appeal) without considering the decision in the case of Dhanuka and Sons (2011) 339 ITR 319 wherein the Assessing Officer's reasonable approach of applying section 14A of the Income Tax Act, 1961 had been upheld against the Assessee's non disclosure of his special knowledge?"
(3.) He submitted that during the relevant year, the assessee earned dividend income of Rs. 6,31,807/- which is exempt under section 10(34) of the Income Tax Act, 1961. The assessee had offered 1% of said exempt income to be treated as expenditure in respect thereof. The Assessing Officer found that there was no basis for such offer and did accept the same. The Assessing Officer invoked section 14A of the Act and applying Rule 8D(2)(ii)worked out the expenditure at Rs. 5,85,519. He relied on a judgment of this court of Dhanuka and Sons v. CIT reported in (2011) 12 taxmann.com 227 (Cal) to submit that the object of section 14A is to disallow the direct and indirect expenditure incurred in relation to income which does form part of the total income.;