TMI Blog2017 (5) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... ehta For The Respondent : Shri J. Mohammed Rizwan ORDER Per Jason P. Boaz, A.M. This appeal by the assessee is directed against the order of the CIT(A)- 48, Mumbai dated 19.03.2015 for A.Y. 2010-11. 2. The facts of the case, briefly, are as under: - 2.1 The assessee company, engaged in the business of land development and construction, filed its return of income for A.Y. 2010-11 on 25.09.2010 declaring NIL income. Subsequently, a revised return of income was filed on 14.10.2010 declaring loss of (-) ₹ 2,92,74,985/-. The case was taken up for scrutiny and the assessment completed under section 143(3) of the Income Tax Act, 1961 (in short 'the Act') vide order dated 21.03.2013 wherein the assessee s loss was determined at (-) ₹ 2,79,60,850/- in view of the following disallowances: - (i) Interest on late payment of Income Tax ₹ 4,55,079/- (ii) Disallowance under section 14A r.w. Rule 8D ₹ 3,67,730/- (iii) Difference of interest on Loan Advance ₹ 4,91,328/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iating the fact that the assessee has not earned any exempt income during the year under consideration and no expenditure was incurred in this regard and therefore no disallowance under section 14A of the Act could have been made. In support of this proposition, the learned A.R. of the assessee placed reliance on the following judicial pronouncements: - (i) Cheminvest Ltd. vs. CIT (378 ITR 33 (Del.) (ii) Garware Wall Ropes Ltd. vs. Add, CIT (ITA No. 5408/Mum/2012) (iii) Vakrangee Ltd. vs. ACIT (ITA No. 6988/Mum/2014 dated 10.08.2016) 4.1.2 It was also contended in ground Nos. 4 5 (supra) that the learned CIT(A) erred in not appreciating that since the investments were made in subsidiary group concerns for the purpose of control and not for the purpose of earning of exempt income and being strategic investment, these investments should be excluded for computing disallowance under section 14 of the Act. In support of this proposition, reliance was placed on the following judicial pronouncements:- (i) Cheminvest Ltd. vs. CIT (378 ITR 33 (Del.) (ii) Garware Wall Ropes Ltd. vs. Add, CIT (ITA No. 5408/Mum/2012) (iii) Vakrangee Ltd. vs. ACIT (ITA No. 6988/Mum/2014 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted that Hon'ble Delhi High Court has not considered Hon'ble Supreme Court judgement in the case of Distributors (Baroda) (P) Ltd. Vs. Union of India (1985) 155 'TR 120/22 Taxman 49 (SC) wherein it was held that Income by way of dividends from domestic company included in the gross total income would, therefore, obviously be income computed in accordance with the provisions of that Act. Hon'ble Supreme Court emphasises that it is the income that should be considered and not simply the receipt. It is further submitted that there is difference between receipt of dividend and income from dividend. Similarly, it is the income which does not form part of total income which is required to be considered u/s.14A of the I.T. Act. In sec.10(34) of the act it is income by way of dividend and not the receipt of dividend which is exempted. 5. Further, such income by way of dividend as is referred to in the provision of Sec.115-0 of the Act is exempt. It means not all the income by way of dividend is exempt, Sec. 115-0 of the I.T. Act deals with the additional income tax chargeable on domestic company on any amount declared, distributed, or paid by such company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion does not form part of the total income in Section 14A of the Income Tax Act, 1961 envisages that there should be an actual receipt of the 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. The Income Tax Appellate Tribunal held that the provisions of Section 14A of the Income Tax Act, 1961 would not apply to the facts of this case as no exempt income was received or receivable during the relevant previous year. It is not the case of the Assessing Officer that any actual income was received by the assessee and the same was includible in the total income. In the facts of the case, the Authorities held that since the investments made by the assessee in the sister concerns were not the actual income received by the assessee, they could not have been included in the total income. The findings of facts recorded by both the Authorities do not give rise to any substantial question of law. Since no substantial question of law arises in this income tax appeal, the income tax appeal is dismissed with no order as to costs. 4.3.2 In the factual and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made by the assessee of ₹ 52,15,95,000/- was strategic investment in group companies for control over these companies and not for investment purpose with the intention of earning of tax exempt dividend income. On a perusal of the details on record, i.e. the impugned order of the learned CIT(A) and the order of assessment we find that the averments of the learned A.R. that the entire shares held by the assessee are in respect of its strategic investments in subsidiary/group concerns is factually correct. We find that a Coordinate Bench of this Tribunal in the case of Fiduciary Euromax Global Markets Ltd. in ITA No. 1349/Mum/2012 and others dated 29.06.2016, relied on by the assessee, at para 14 thereof on similar factual circumstances has held that: - 14. ...................... .......... strategic investment in group companies therefore cannot be held to be for investment purposes or with the object of earning of dividend/tax exempt income, but the same, in the light of above referred to judicial decisions can safely be said to be related to the business activity of the assessee and no disallowance, therefore, is attracted on such an income u/s 14A of the Act. ..... 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