TMI Blog2015 (2) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent : Shri Ajay Vohra, Sr. Adv. Shri Gaurav Jain, Adv. ORDER Per T. S. Kapoor, AM: These are two appeals filed by Revenue against the order of Ld. CIT(A) dated 30.07.2012 and dated 19.07.2013 respectively. Similar issues are involved in these two appeals. One of the grounds of Revenue is the action of Ld. CIT(A) by which he had deleted disallowance made u/s 14A of the Act and the 2nd grievance is the action of Ld. CIT(A) by which he had allowed depreciation on world trade centre and world trade tower which was disallowed by A.O. Though these appeals were filed by Revenue but Ld. A.R. at the outset, submitted that the disallowance u/s 14A is now fully covered in favour of the assessee as various High Courts have held that where dividend is not received, disallowance u/s 14A cannot be made. In support, Ld. A.R. relied on the following case laws: CIT Vs Holcim India Pvt. Ltd. I.T.A.No. 486 and 299/2014 decided by Hon'ble Delhi High Court placed in paper book pages 9A-9M. CIT Vs Shivam Motors (P) Ltd. I.T.A.No. 88 of 2014 placed at paper book pages 10-16. CIT Vs Corrtech Energy Pvt. Ltd. I.T.A.No. 239/2014 placed at paper book pages 17-21 CIT Vs M/s. La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee Company in subsidiary companies for strategic Purposes. iii) The investment during the year was made in a subsidiary company which was situated outside India and, therefore the dividend income if any received from foreign companies was not exempt. 5.1 We find that various High Courts have dealt with the issue of disallowance u/s 14A where there is no receipt of dividend. The Hon ble Jurisdictional High Court of Delhi in the case of Holcim India Pvt. Ltd. (supra) vide para 14 to 17 has held as under: 14. On the issue whether the respondent-assessee could have earned dividend income and even if no dividend income was earned, yet Section l4A can be invoked and disallowance of expenditure can be made, there are three decisions of the different High Courts directly on the issue and against the appellant-Revenue. No contrary decision of a High Court has been shown to us. The Punjab and Haryana High Court in Commissioner of Income Tax, Faridabad Vs. M/s. Lakhani Marketing Incl., ITA No. 970/2008, decided on 02.04.2014, made reference to two earlier decisions of the same Court in CIT Vs. Hero Cycles Limited, [2010] 323 ITR 518 and CIT Vs. Winsome Textile Industries Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of dividend. When declared, it is subjected to dividend distribution tax. 16. What is also noticeable is that the entire or whole expenditure has been' disallowed as if there was no expenditure incurred by the respondent-assessee for conducting business. The CIT(A) has positively held that the business was set up and had commenced. The said finding is accepted. The respondent-assessee, therefore, had to incur expenditure for the business in the form of investment in shares of cement companies and to further expand and consolidate their business. Expenditure had to be also incurred to protect the investment made. The genuineness of the said expenditure and the fact that it was incurred for business activities was not doubted by the Assessing Officer and has also not been doubted by the CIT(A). 17. In these circumstances, we do not find any merit in the present appeals. The same are dismissed in limine. 5.2 Similarly, Hon ble Allahabad High Court in the case of Shivam Motors in I.T.A.No. 88/2014 has held as under: 15 As regards the second question, Section 14A of the Act provides that for the purposes of computing the total income under the Chapter, no , deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest in t~e respective companies for doing the business. Ld. CIT(A) himself has admitted that assessee is doing the business and the business of the assessee company has been set up, therefore, there is no question that assessee has invested the funds for earning of dividend. 16:- Similar issue came up before the Chandigarh Bench of the Tribunal in the case of M/s Spray Engineering Devices Ltd. (*supra). In this case also the disallowances were made u/s 14A by the assessing officer by observing that-assessee has purchased shares of ₹ 3.01 crores of M/s Shri Sai Baba Sugar Mills Ltd. for earning exempt income. This action of the assessing officer was confirmed by CIT(A). On second appeal before the Tribunal, the Tribunal held that, we find merit in the plea of the assessee that where a business strategy had been adopted by the assessee by way of investment in shares of sick company in order to make over the said company for widening its operation of business, cannot be held to be investment per se. The decision making of a business man by way of strategy planning in allied line of business is a decision made in the course of carrying on the business and the Assessing offi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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