TMI Blog2015 (2) TMI 1097X X X X Extracts X X X X X X X X Extracts X X X X ..... fford reasonable opportunity of being heard to the assessee before re-computing deduction under Rule 8D(2)(iii) of the IT Rules. It is ordered accordingly. - Decided in favour of assessee for statistical purposes. - ITA No. 4582/Del/2013 - - - Dated:- 6-2-2015 - SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER For the Petitioner : Shri Salil Agarwal, Advocate And Shri Shailesh Gupta, CA For the Respondent : Sh. Robin Rawal, Sr. D.R. ORDER PER SHRI GEORGE GEORGE K, JM: 1. This appeal, at the instance of the assessee, is directed against the order of the CIT(A) dated 10.06.2013. The relevant assessment year is 2009-10. 2. The effective grounds argued in the course of the hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the AO is not justified in including investment, which have not yield income, for the purpose of disallowance under Rule 8D(2)(iii). The CIT(A) rejected the contentions raised by the assessee and affirmed the order of the assessment. However, CIT(A) directed the AO to exclude a sum of ₹ 2.6 crores being the mutual fund, on which, the assessee had paid capital gains tax under the head long term/short term capital gains for the AYs 2008-09 and 2009-10. For re-computation of disallowance u/s 14A, the appeal of the assessee was restored to the AO (for the exclusion of 2.6 crores from the average investment ). 5. The assessee being aggrieved is in appeal before us. Ld. counsel for the assessee submitted that the investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT Vs. Holcim India P. Ltd. reported in ITA No.486/2014 and 299/2014 have held that if there is no exempt income earned during the year, they cannot be disallowed by invoking the provision of Section 14A of the Act. The relevant finding of the Hon ble Jurisdictional High Court in the case of Holcim India P. Ltd. (Supra) reads as follows: Para 14 On the issue whether the respondent-assessee could have earned dividend income and even if no dividend income was earned, yet section 14A 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A), which has been affirmed by the Tribunal, hence does not give rise to any substantial question of law. Hence, the deletion of the disallowance of ₹ 2,03,752/- made by the Assessing Officer was in order . Para 15. Income exempt under Section 10 in a particular assessment year, may not have been exempt earlier and can become taxable in future years. Further, whether income earned in a subsequent year would or would not be taxable, may depend upon the nature of transaction entered into in the subsequent assessment year . 8. Similarly the Chennai Bench of the ITAT in the case of ACIT Vs. M/s Computer Age Management Services (P) Ltd. reported in ITA No.1236 and 1240/Mds/2014 has held as follows:- Para 10. We have h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine as mentioned earlier in respect of Numerator B in Rule 8D(2)(ii) of the Act. 8.1 Thus, not all investments become the subject matter of consideration when computing disallowance under section 14A read with rule 8D. The disallowance under section 14A read with rule 8D is to be in relation to the income which does not form part of the total income and this can be done only by taking into consideration the investment which has given rise to this income which does not form part of the total income. Under the circumstances, the computation of the disallowance under section 14A read with rule 8D(2)(iii) which is issue in the assessee's appeal is restored to the file of the Assessing Officer for recomputation in line with the directi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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