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2022 (7) TMI 320 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D - DR submitted that the assessee having borrowed funds for the purpose of making the investments in the sister concern and disallowance u/s. 14A of the Act if not confirmed, a disallowance u/s. 36(1)(iii) of the Act should be considered by the Tribunal - HELD THAT:- Coming to the argument of CIT-DR that the disallowance u/s. 36(1)(iii) of the Act is liable to be made, we are unable to agree with this argument of ld. CIT-DR as this is not an issue that has been raised by the AO or the CIT(A) and it is not open to an appellate authority, being the Tribunal, to make a disallowance under the provision which has not been invoked by the AO. It is also to be mentioned here that in an appeal the revenue is fully entitled to defend the order of the AO before the Tribunal. It cannot seek to bring to tax any income or take refuge of any of the other provisions of the Act for the purpose of making a fresh addition or disallowance. The assessee admittedly has not received any exempt income. The assessee's investment in its sister concern are claimed by the assessee to be in the business interest of the assessee insofar as the assessee has started its activity in coal also. But the assessee has not been able to point out in the audit report or the balance sheet where it has dealt with in coal. A perusal of the decision of the Hon'ble Supreme Court in the case of Chettinad Logistics Pvt. Ltd. (2018 (7) TMI 567 - SC ORDER] as also the decision in the case of GVK Project and Technical Services Ltd. (2019 (5) TMI 725 - SUPREME COURT] shows that no disallowance u/s. 14A can be made if no exempt income has been received. However, under the provisions of rule 8D(2)(ii), admittedly, a disallowance is to be made and to such extent the disallowance has been made by the AO and confirmed by the CIT(A). Therefore, the addition representing Rs. 1,49,06,500/- stands confirmed. The balance of the disallowance as made by the AO and confirmed by the CIT(A) by invoking the provisions of Section 14A r.w.r. 8D, stands deleted. Appeal of assessee is partly allowed.
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