TMI Blog2017 (2) TMI 991X X X X Extracts X X X X X X X X Extracts X X X X ..... A. No. 1424/Mds/2016 - - - Dated:- 13-2-2017 - Shri M. Balaganesh, Accountant Member and Shri Duvvuru RL Reddy, Judicial Member For The Appellant : Shri A.V. Sreekanth, JCIT For The Respondent : Ms. B. Jaisheila, C.A. ORDER PER DUVVURU RL REDDY, JUDICIAL MEMBER: This appeal filed by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals) 6, Chennai, dated 03.03.2016 relevant to the assessment year 2012-13. The only effective ground raised in the appeal of the Revenue is that the ld. CIT(A) has erred in deleting the disallowance made under section 14A of the Income Tax Act, 1961 [ Act in short]. 2. Brief facts of the case are that the assessee has filed its return of income on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) and also placed reliance on the recent judgement in the case of Redington (India) Ltd. v. Addl. CIT in T.C.A. No. 520 of 2016 dated 23.12.2016, wherein, the Hon ble Jurisdictional High Court has held that when there is no exempt income there cannot be a disallowance of expenditure. 6. We have heard both sides, perused the materials available on record and gone through the orders of authorities below. From the balance sheet, the Assessing Officer has observed that the assessee had investments of ₹.261.40 crores, which was an increase from ₹.13.71 crores in the previous year. Most of the investments are in subsidiary companies. Since any investment in a company is capable of earning dividend, the assessee was asked to expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditure can be determined and disallowed in view of the decision of the Tribunal in the case of EIH Associated Hotels Ltd. v. DCIT (supra). We have perused the above order of the Tribunal, wherein, it was observed and held as under: 6. We have heard the submissions made by the rival parties. We have also examined the orders passed by the authorities below and the judgments/orders cited by the representatives of both the parties. The first issue in the appeal of the assessee relates to disallowance made u/s. 14A r.w.r. 8D. The Assessing Officer has made disallowance to the tune of ₹ 4,32,66,500/-. The contention of the assessee is that the assessee has earned dividend income of ₹ 4.6 Lakhs which is fully exempt u/s. 10(34) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in its subsidiary are not to be reckoned for disallowance u/s. 14A r.w.r. 8D. The Assessing Officer is directed to recompute the average value of investment under the provisions of Rule 8D after deleting investments made by the assessee in subsidiary company. Accordingly, this ground of appeal of the assessee is partly allowed and that of the Revenue is dismissed. The findings of the CIT(Appeals) on the issue are accordingly modified. 6.3 Further, in the case of Redington (India) Ltd. v. Addl. CIT (supra), the Hon ble Jurisdictional High Court has held as under: 15. The exemption extended to dividend income would relate only to the previous year when the income was earned and none other and consequently the expen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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