TMI Blog2017 (5) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... at the interest paid during the year did not have any nexus to the investments and thus, no tax free income from these investments was earned. The findings above have been recorded by the Tribunal after appreciating the factual position on record and the relevant provisions of law, which have not been shown to be illegal or perverse by the learned counsel for the appellant. Thus, no substantial question of law arises. - Decided against revenue - ITA No. 14 of 2017 (O&M) - - - Dated:- 20-2-2017 - MR. AJAY KUMAR MITTAL MR. RAMENDRA JAIN JJ. Present: Mr. Rajesh Katoch, Advocate for the appellant. Ajay Kumar Mittal, J. 1. This order shall dispose of ITA Nos. 14 and 32 of 2017 as according of the learned counsel for the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act to the extent of the exempt income of ₹ 23,16,000/-whereas as per Section 14A of the Act, the expenses which are relatable to earning of exempt income have to be considered for disallowance, irrespective of the fact whether any such income has been earned during the relevant year or not and therefore the disallowance under Section 14A of the Act cannot be restricted to the extent of amount of the exempt income? 3. A few facts relevant for the decision of the controversy involved as narrated in ITA No. 14 of 2017 may be noticed. During the course of assessment proceedings for the assessment year in question, the Assessing Officer noticed that the assessee had made investments to the tune of ₹ 67,50,41,000/- in previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t expenditure under Section 14A of the Act could be made. Hence, the instant appeals by the revenue. 4. We have heard learned counsel for the appellant. 5. Admittedly, the assessee had made investments to the tune of ₹ 67,50,41,000/- in the previous year which was shown in the balance sheet for the period upto 31.03.2010. The assessee had not shown any income on this amount except dividend income of ₹ 23,16,000/- which was claimed as exempt under Section 10(34) of the Act. The assessee was asked by the Assessing Officer to explain the position. The Assessing Officer after examining the matter disallowed the amount of ₹ 84,00,560/- and added the same to the income of the assessee under Section 14A of the Act. The ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the schedules annexed thereto (Paper Book Page-1) that the investment in earlier year was of ₹ 63,30,41,000/-, while it is to an amount of ₹ 67,50,41,000/- at the end of the current year, the increase of ₹ 4,20,00,000/- is on account of transfer of share application money to share allotment, as is evident from page 4 of the Paper Book. As such, it is quite evident that the investments were made in earlier year, no new investment has been made in the current year. From the perusal of Paper Book page 8, which is Annexure-20 to the Profit Loss Account, it appears that no interest to bank or otherwise was paid in the earlier year, which goes to prove that the investments having been made in earlier year were made out of own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has all along been contending before the lower authorities that there was no need for it to incur any such expenditure, the Assessing Office straightaway, without commenting on such claim of the assessee, embarked upon computation under Rule 8D of the Income Tax Rules for the purpose of Section 14D of the Act. She has nowhere recorded her satisfaction that how such claim of the assessee is not acceptable to her. From the perusal of the whole order of the Assessing Officer, no such satisfaction can be inferred directly or indirectly. In such circumstances, the recording of satisfaction of the Assessing Officer is a must, as held by the Hon ble Jurisdictional Punjab Haryana High Court in the case of CIT Vs. Deepak Mittal. 36CCH 51 (2013) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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