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2019 (10) TMI 245 - ITAT MUMBAIRevision u/s 263 - suo-moto disallowance u/s 14A r.w. Rule 8D being expenses attributable to earning of exempt income after applying the Rule 8D - HELD THAT:- As the stand of assessee during the assessment as well as in revision proceeding that no exempt income is earned by the assessee. We have perused the Balance-sheet and Profit & Loss Account of the assessee wherein in Schedule-14 (other income) forming part of Balance-sheet shows Nil income. In Schedule-6 (investments), in Column-B assessee has shown investment in units of mutual fund (growth scheme) and the income of such investment is not exempted. Thus, as per the decision of Hon’ble Delhi High Court in Cheminvest Investment Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT], Redington (India) Ltd. [2017 (1) TMI 318 - MADRAS HIGH COURT] that when there is no exempt income in the relevant period, there cannot be disallowance of expenditure under section 14A. Accordingly, the assessment order under section 143(3) is not erroneous. The Assessing Officer has adopted a possible view for not making any disallowance under section 14A. Though, there is no discussion about the acceptance of contention of the assessee in its reply dated 11.02.2013, filed during the assessment proceeding. We are of the considered view that the order passed by Assessing Officer was not erroneous and thus the twin condition as laid down by Hon’ble Apex Court in Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] the recourse of section 263 cannot be invoked against the assessment order. Therefore, the assessee succeeds on legal ground. Since, the assessee succeeded on legal ground, therefore, adjudication on other contentions and issues raised by assessee have become academic.
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