TMI Blog2017 (3) TMI 1563X X X X Extracts X X X X X X X X Extracts X X X X ..... SIDENT AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER Revenue by : Shri V. Sreekar Assessee by : Shri V. Raghavendra Rao ORDER PER G. MANJUNATHA, A.M.: This appeal filed by the Revenue is directed against the order of the CIT(A)-4, Hyderabad dated 08-09-2016 and it pertains to the assessment year 2012-13. The Revenue has raised the following grounds of appeal. 1. The Ld. CIT(A), erred in deleting the disallowance made u/s 14A by holding that assesse did not earn any exempt income. 2. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 3. The appellant craves leave to amend or alter any grounds or add a new ground, which may be nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince, there is no exempt income in the nature of dividend from shares, disallowance of expenditure incurred in relation to such income which does form part of total income does not arise. The A.O after considering the explanations of the assesse held that the assessee has shown investment in the shares, the income from which was exempt from tax u/s 10(38) of the IT Act and hence, the assesse was liable for disallowance of expenditure incurred in relation to the exempt income as required by the provision of Sec. 14A of the Act, accordingly worked out disallowances u/s 14A r.w.r 8D and made addition of ₹ 44,84,659/- 3. Aggrieved by the assessment order the assesse preferred an appeal before the CIT(A). Before the CIT(A), the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat Sec. 14A of the IT Act will not be applicable, where no exempt income is received/receivable during the relevant assessment year. The CIT(A) after considering the relevant facts and by following the decision of Co-ordinate Bench, has rightly deleted additions towards disallowance made u/s 14A of the IT Act and his order should be upheld. On the other hand, the Ld. DR strongly supported the order of the A.O 5. We heard both the parties and perused the material available on record. The A.O invoked Sec. 14A r.w.r 8D and disallowed expenditure incurred in relation to exempt income which does not form part of total income under this Act. According to the A.O, the assesse is liable for disallowance u/s 14A of the IT Act, the moment there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held hat section 14A will not apply where no exempt income is received or receivable during the relevant assessment year. In view of the same, assesses s appeal on this ground is allowed. 6. In this view of the matter and also respectfully following the decision of the ITAT, Hyderabad in the case of Prathista Industries Ltd., Vs. DCIT-16(3), in ITA No. 1302/Hyd/2015 dated 29-04-2016, we are of the view that there is no disallowance u/s 14A r.w.s 8D, if the assesse has not received any exempt income which does not form part of the total income under this Act. The CIT (A) after considering the relevant facts has rightly deleted additions made by the A.O. We do not find any error or infirmity in the order of the CIT(A), hence we upheld th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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