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Planman Consulting (India) Pvt. Ltd. Versus ACIT, Range-14, New Delhi

2016 (1) TMI 856 - ITAT DELHI

Disallowance u/s 14A - Addition towards expenditure alleged to be incurred in earning exempt income - Held that:- It is undisputed fact that there was no exempt income earned during the previous relevant assessment year under consideration. It is trite law that in the absence of any exempt income, no addition under Section 14A can be made. We hold that no addition is called for on account of any alleged expenditure towards any exempt income. - Decided in favour of assessee.

Disallowan .....

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ITO Vs. Anil Kumar & Co., (2013 (7) TMI 231 - KARNATAKA HIGH COURT )- Decided in favour of assessee.

Disallowance under Section 80G - Held that:- There is no evidence on record to show that the receipts are produced before the Assessing Office. Accordingly, we restore the matter to the file of the Assessing Officer for verification of the donations made. - Decided in favour of assessee for statistical purposes.

Disallowance of gifts and awards distributed to the trainees .....

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sessing Officer cannot be accepted. - Decided in favour of assessee - ITA Nos. 5752 & 5753/Del/2013 - Dated:- 6-11-2015 - SH. INTURI RAMA RAO, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Sh. Ved Jain, CA For The Respondent : Smt. Anjula Jain, Sr. DR ORDER PER INTURI RAMA RAO, A.M.: ITA No. 5752/Del/2013 for AY 2008-09: This appeal filed by the assessee is directed against the order of learned CIT(A), dated 21.08.2013 passed for the assessment year 2008-09. The .....

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confirmed rejecting the contention of the assessee that there being no tax free income earned by the assessee, the expenses relating to such income were NIL. 3(i)On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the Ao in disallowing an amount of ₹ 15,85,328/- invoking the provision of section 40(a)(ia) of the Act. (ii)That the disallowance has been confirmed ignoring the fact that TDS has been deposited before th .....

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e as deduction under section 80G of the Act. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the AO in disallowing an amount of ₹ 15,000/- holding the same be prior period expenses. 6. The appellant craves leave to add, amend or alter any of the grounds of appeal. 2. The brief facts of the case are that the appellant is a company duly incorporated under the provisions of Companies Act, 1956. It is engaged in t .....

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towards earning of exempted income u/s 14A of ₹ 11,96,000/- ii. Employees contribution towards PF & ESI of ₹ 88,24,215/- iii. Additions under Section 40(a)(ia) of ₹ 15,85,328/- iv. Excess claim made u/s 80G of the I.T. Act of 14,02,250/- Being aggrieved from the assessment order, the assessee filed an appeal before the learned CIT(A) who vide impugned order date 21.08.2013 partly allowed the appeal. Being aggrieved, the appellant is before us with the present appeal. 3. We .....

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e on the decisions of the Hon ble Jurisdictional High Court in the cases of Cheminvest Vs. ITO, ITA No. 749/2014, dated 02.09.2015 and CIT Vs. Holcim India P. Ltd., ITA No. 486/2014 & 299/2014, dated 5th September, 2014. 4.2 On the other hand, the ld. Senior DR relied on the orders of the lower authorities. 4.3 We heard the rival submissions and perused the material on record. It is undisputed fact that there was no exempt income earned during the previous relevant assessment year under cons .....

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t answers the question framed by holding that the expression "does not form part of the total income" in Section 14A of the envisages that there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year. " (ii) Fur .....

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e income. Merely by holding shares it cannot be said that on sale of such shares income will be exempt. Income of listed company's shares that too when sold on Exchange is exempt in case there is a long term capital gain. Thus sale of share per se is not exempt. Further the issue of dividend income being taxable or nontaxable will be in the year in which such dividend is received. In the absence of any dividend being received it cannot be said that income is exempt. The observation of the Ho .....

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akhani 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, [2010J 323 ITR 518 and CIT Vs. Winsome Textile Industries Limited, [2009J 319 ITR 204 to hold that Section 14A cannot be invoked when no exempt income was earned. The second decision is of the Gujarat High Court in Commissioner of Income Tax-I Vs. Corrtech Energy (P.) Ltd. [2014J 223 Taxmann 130 (Guj.). The third decision is of the Allahabad H .....

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ion 14A provides is that if there is any income which does not form part of the income under the Act, the expenditure which is incurred for earning the income is not an allowable deduction. For the year in question, the finding of fact is that the assessee had not earned any tax free income. Hence, in the absence of any tax free income, the corresponding expenditure could not be worked out for disallowance. The view of the CIT(A) , which has been affirmed by the Tribunal, hence does not give ris .....

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le of shares is presently not taxable where security transaction. tax has been paid, but a private sale of shares in an off market transaction attracts capital gains tax. It is an undisputed position that respondent assessee is an investment company and had invested by purchasing a substantial number of shares and thereby securing right to management. Possibility of sale of shares by private placement etc. cannot be ruled out and is not an improbability. Dividend may or may not be declared. Divi .....

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sessee, 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. .....

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filing of the return of income. This fact is emerging out of the assessment order vide page no. 13 of the assessment order. It is settled principle of law that the second proviso to section 40(a)(ia) is applicable with retrospective effect and in this connection reliance is placed on the following decisions: i. ITO Vs. Anil Kumar & Co., 354 ITR 170 (Kar.) ii. CIT Vs. Virgin Creation, ITA No. 302 of 2011, dated 23.11.2011 (Cal.) iii. CIT Vs. Talbros P. Ltd., ITA No. 218 of 2013, dated 06.09.2 .....

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nations made. Accordingly, this ground of appeal allowed for statistical purposes. 7. Ground no. 5 is not pressed by the learned counsel for the assesee. Accordingly, the same is dismissed as not pressed. 8. Hence, this appeal is allowed for statistical purposes. ITA No. 5753/Del/2013 for AY 2009-10: 9. This appeal filed by the assessee is directed against the order of learned CIT(A), dated 21.08.2013 passed for the assessment year 2009-10. The assessee raised the following grounds of appeal: 1. .....

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