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2015 (3) TMI 1172 - ITAT DELHI

2015 (3) TMI 1172 - ITAT DELHI - TMI - Disallowance u/s 14A - Held that:- Assessee had not earned any exempt income during the year and therefore disallowance u/s 14A was not warranted. - Decided in favour of assessee - I.T.A. No. 1567 /Del/2013 - Dated:- 25-3-2015 - SHRI G. C. GUPTA, HON BLE VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER For the Appellant: Shri Ashwani Taneja, Adv. For the Respondent: Shri P. Dam Kanunjha, Sr. DR ORDER PER T.S .....

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gly computing the disallowance under Rule 8-D of Income Tax Rules. 3. That having regards to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234B of the Income Tax Act, 1961. 2. At the outset, Ld. A.R. submitted that the assessee had not earned any exempt income and in view of the judgment of Hon'ble Delhi High Court in the case of CIT Vs Holcim India Pvt. Ltd. in I.T.A. No. 486/2014 .....

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ied upon the orders of authorities below. 4. We have heard rival parties and have gone through the material placed on record. We find that A.O. has not pointed out any income earned by assessee which was exempt neither Ld. CIT(A) has held that a particular income was exempt. Ld. A.R. has submitted that there was no exempt income earned by assessee. The fact that assessee did not have exempt income also becomes clear from the notings of Ld. CIT(A) as contained in para 7 which is reprod .....

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above, we find that there was no exempt income and A.O. had made addition holding that assessee had source of exempt income. We find that the case of assessee is fully covered in its favour by the order of Hon'ble Delhi High Court in the case of CIT Vs Holcim India Pvt. Ltd. (supra) which under similar circumstances has held as under: 13. We are confused about the stand taken by the appellant-Revenue. Thus, we had asked Sr. Standing Counsel for the Revenue, to state in his submis .....

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nvestments and this expenditure cannot be allowed under Section 14A. 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 Haryana High Court in Commission .....

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). The third decision is of the Allahabad High Court in Income Tax Appeal No. 88 of 2014, Commissioner of Income Tax (Ii) Kanpur, Vs. M/s. Shivam Motors (P) Ltd. decided on 05.05.2014. In the said decision it has been held: "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 shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form p .....

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been affirmed by the Tribunal, hence does not give rise to any substantial question of law. Hence, the deletion of the disallowance of ₹ 2,03Js2/- made by the Assessing Officer was in order". 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 .....

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