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2016 (4) TMI 1040 - ITAT DELHI

2016 (4) TMI 1040 - ITAT DELHI - TMI - Disallowance u/s 14A - Held that:- AO has wrongly disallowed the total expenditure by applying the provisions of Section 14A read with Rule 8D of the I.T. Act and similarly, Ld. CIT(A) has also wrongly restricted the disallowance on account of administrative expenses in spite of the fact that assessee has not received any exempt income during the relevant previous year. Therefore, respectfully, following the decision of the Hon’ble High Court in the case of .....

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4/Del/2012 - Dated:- 4-4-2016 - Shri N. K. Saini, Accountant Member And Shri H. S. Sidhu, Judicial Member For the Petitioner : Sh. R.M. Mehta, CA For the Respondent : Sh. V.R. Sonbhadra, Sr. DR ORDER Per Bench These are the Cross Appeals filed by the Assessee and Revenue against the impugned order dated 21.8.2012 pertaining to assessment year 2009-10. Since the issues involved in the these appeals are common and identical, hence, they are being consolidated and disposed of by this common order f .....

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ng the year and accordingly did not incur any expenditure attributable to the earning of exempt income. 3. Without prejudice to above, the Ld. CIT(A) ought to have excluded those expenses which are not directly or indirectly attributable to the earning of exempt income for the purpose of computing disallowance u/s. 14A read with Rule 8D. 4. The appellant reserves to itself, the right to add, alter, amend, substitute, withdraw and / or any Ground(s) of Appeal on or before the date of hearing. 3. .....

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Income Tax Act, 1961. 3. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing. 4. The brief facts of the case are that the Assessee filed its Return of Income of ₹ 6,870/- on 30-09-2009. The same was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred Act ) on 24-01-2011. The AO selected the case for scrutiny by issue of notice under section 143(2) of the Act dated 19-08-2010. The AO also issued detailed que .....

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essee company has debited a sum of ₹ 1,13,26,240/- as interest paid. It has also invested a sum of ₹ 163.58 Crores in quoted and unquoted investments. However, as per Profit and Loss Account no dividend income has been shown on such investments. The assessee was asked to explain as to why the provisions of section 14A read with Rule 8D be not invoked as the assessee has claimed interest expenses which is attributable to earning of exempted income. Though no dividend income is earned .....

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157.30 crores at the beginning of the assessment year and there has been no further investments as well as borrowings during the relevant assessment year. 4.2 The AO considered the reply of the Assessee and held while invoking the provisions of section 14A, it is not necessary that the investments yield any exempted income during the year under consideration. Since the money borrowed had been utilized in the purchase of shares held as investment, the interest paid on so borrowed monies is allowa .....

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4A of the I.T. Act read with Rule 8D of the I.T. Rules and computed the total income of the assessee at ₹ 1,82,87,403/- and completed the assessment u/s. 143(3) of the I.T. Act, 1961 on 16.11.2011. 5. Against the assessment order dated 16.11.2011 the Assessee filed the Appeal before the Ld. CIT(A) who vide impugned order dated 21.8.2012 partly allowed the appeal of the Assessee and restricted the disallowance to the amount of ₹ 65,58,705/- and allowed the relief to the assessee of &# .....

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f Delhi has held that Section 14A will not apply if no exempt income is received or receivable during the relevant previous year. He has also filed the copy of the said order dated 02.9.2015 passed by the Hon ble High Court. 7. On the other hand, Ld. DR relied upon the orders of the authorities below. 8. We have heard both the parties and perused the orders of the revenue authorities alongwith the order dated 02.9.2015 passed by the Hon ble High Court of Delhi in the case of Cheminvest Limited v .....

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