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2019 (6) TMI 1174 - ITAT KOLKATAAddition u/s 14A read with Rule 8D(2)(ii) and under rule 8D(2)(iii) - no exempt income is received or receivable during the relevant previous year - CIT(A) deleted the addition - HELD THAT:- It is an admitted fact that the assessee company has not earned any dividend income during the year in respect of investments made as per the audited accounts. Since no exempt income earned by the assessee, therefore, there should not be any disallowance on account of section 14A. The said issue of the assessee is squarely covered in the case of CIT vs. Holcim India Pvt. Ltd. [2014 (9) TMI 434 - DELHI HIGH COURT] wherein it was held that in the absence of any tax free income, the corresponding expenditure could not be worked out for making disallowance u/s. 14A of the Income Tax Act, 1961 In the case of Chemnivest vs. Commissioner of Income Tax-Vl, [2015 (9) TMI 238 - DELHI HIGH COURT] held that section 14A will not apply if no exempt income is received during the relevant previous year. Since the assessee does not have any exempt income therefore no disallowance is warranted. That being so, we decline to interfere in the order passed by the Ld. CIT(A), his order on this issue, is hereby upheld and grounds raised by the revenue is dismissed. Addition of income from other sources u/s 56(2)(viib) - allotment of shares at a price which exceeds fair market value of the share and thus violated the provisions of section 56(2)(viib) - HELD THAT:- AO has observed that the assessee company has made allotment of 6,19,000 Equity Shares @ ₹ 42/- per share during the instant year at a price which exceeds fair market value of the share and thus the provisions of section 56(2)(viib) of the Act was violated. The fair market value on the basis of book value of company as on 31.03.2013 was calculated by ld. Assessing Officer at ₹ 25.55/- per share. Revaluation reserves need not be deducted while calculating the fair market value, as per rule 11UA(2) of the I.T. Rules. Considering all no infirmity in the order passed by the CIT(A) hence we dismiss the ground raised by the revenue.
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