TMI Blog2013 (11) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... e subjected to disallowance under section 14A of the Act, which in any case is relatable to disallowance of the expenditure out of the exempt income earned by the assessee, by way of its investment in shares of other company. In the facts of the present case the investment was purely of business nature as the company in which the amount was invested was a loss making company and there was no question of earning any dividend income from such investment. In the totality of the facts and circumstances of the case, no merit in the order of the authorities. The assessee acquired controlling interest in those companies just to run these companies properly - Till date no dividend has been earned by the assessee as assessee is doing the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces nor any goods or services been obtained against them. Moreover, the assessee has also not disclosed any dividend income from its investment amounting to Rs. 18509150756/- with M/s Ambuja Cements Ltd., as appearing in the balance sheet. Therefore, he disallowed the expenses amounting to Rs. 8,75,35,452/- claimed in the P L A/c. 4. Similarly, the disallowance was made for AY 2008-09 at Rs. 7,02,54,564/-. 5. Assessee preferred appeal before the CIT(A) for both the years. CIT(A) after considering the submissions and perusing the material on record held that business of the assessee has been set up, therefore, disallowance of the expenses at the end of the assessing officer was not justified. These findings have been recorded by CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... une of Rs. 8,75,35,452/- has been incurred for investment and hence in the light of the above factual position, the entire expenditure is not allowable in view of Section 14A of the Act. Thus, disallowance made by the Assessing officer is confirmed though on a different ground and as such, the appeal preferred by the appellant is dismissed . 7. Similar finding has been recorded by CIT(A) for A.Y. 2008-09. 8. Now the assessee is in appeal herein before the Tribunal against the finding of CIT(A) for both of the years. 9. Ld. Counsel for the assessee vehemently argued that the ld. CIT(A) has no jurisdiction to enhance the income on an issue which was not considered by the assessing officer. For this purpose reliance is placed on the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment Ltd. 15 Taxmann.com 390 (Del.). Further reliance was placed on the decision of Chandigarh Bench of the ITAT in the case of M/s Spray Engineering Devices Ltd. rendered in ITA no. 701/Chd/2009 vide order dated 22-6-2012, where identical issue was involved. Relevant finding given by the Tribunal were also read, which are incorporated in para 39 to 42. 10. On the other hand ld. DR placed reliance on the orders of assessing officer and CIT(A). It was further submitted by ld. DR that CIT(A) has power to enter into the shoes of assessing officer and therefore disallowance u/s 14A was correctly made. 11. In reply it was submitted by ld. AR that ld. CIT(A) has not given any finding that assessee has not made investment for the purpose of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be taken either by issuing notice u/s 148 or initiating proceedings u/s 263 of the Act, but ld. CIT(A) has no power to make such disallowance which assessing officer has not made. The facts are identical herein before us as the assessing officer has not made any disallowance u/s 14A, as he disallowed the entire expenditure by holding that business of the company has not set up. 14. Ld. CIT(A) has accepted the ground of the assessee that business was set up and expenditure claimed in the P L A/c cannot be disallowed. However, he disallowed the entire expenditure u/s 14A which was not disallowed by the assessing officer. In view of the decision of the Hon ble Delhi High Court in the case of Gurinder Mohan Singh Nindrajog (supra), no su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a decision made in the course of carrying on the business and the Assessing officer cannot sit in judgment seat to comment upon the same. One the assessee has been found to have made a business investment by way of shares in related line of business, the said investment though held by way of shares in the said company cannot be subjected to disallowance under section 14A of the Act, which in any case is relatable to disallowance of the expenditure out of the exempt income earned by the assessee, by way of its investment in shares of other company. In the facts of the present case the investment was purely of business nature as the company in which the amount was invested was a loss making company and there was no question of earning any d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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