TMI Blog2017 (9) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid judgment of the Hon'ble Madras High Court clearly militates against the Grounds sought to be raised by the Revenue before us. Apart therefrom, the Hon'ble Delhi High Court in the case of Cheminvest Ltd. Vs. CIT (2015 (9) TMI 238 - DELHI HIGH COURT) also supports the proposition laid down in the two judgments of the Hon'ble Madras High Court. - Decided in favour of assessee. - ITA No.496/Mum/2017 - - - Dated:- 23-8-2017 - SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Appellant : Shri V. Justin For The Respondent : Shri Rakesh Mohan ORDER PER G.S.PANNU,A.M: The captioned appeal filed by the Revenue pertaining to assessment year 2012-13 is directed against an order p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclaring Nil income. The Assessing Officer noticed that assessee was holding investments to the tune of ₹ 37,24,38,266/-; and, according to the Assessing Officer the assessee ought to have made disallowance of the expenditure in relation to the exempt income as required under section 14A of the Act. The explanation of the assessee was that it has not earned any exempt income by way of dividend or long term capital gain exempt under section 10(38) of the Act and, therefore, no disallowance was required to be made in terms of section 14A of the Act . Further, assessee pointed out that the investments in question were in the Special Purpose Vehicles(SPV s)/Joint Ventures/ Associates/Subsidiaries, which was a part of the business activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cases where no income has been earned by the assessee, which is claimed to be exempt during a particular year. 7. We have carefully considered the rival submissions. Quite clearly, the controversy before us is directly covered by the judgments of the Hon'ble Madras High Court in the case of Redington (India) Ltd.(supra) as well as Chettinad Logistics (P) Ltd., (supra). In fact, the CBDT circular sought to be relied upon by the Ld. Departmental Representative has also been taken note of the by the Hon ble High Court. Pertinently, the Hon'ble Madras High Court in the case of Redington (India) Ltd.(supra) has taken the following reasoning:- 12.3 The reasoning of the Division Bench is contained in the following part of the jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be effected even in a situation where a tax payer has not earned any taxable income in a particular year. 9. We are unable to subscribe to the aforesaid view. The provisions of section 14A were inserted as a response to the judgments of the Supreme Court in Commissioner of Income Tax v. Maharashtra Sugar Mills Limited [1971] 82 ITR 452 and Rajasthan State Ware Housing Corporation v. Commissioner of Income-tax [2002] 242 ITR 450 in terms of which, expenditure incurred by an assessee carrying on a composite business giving rise to both taxable as well as non-taxable income, was allowable in entirety without apportionment. It was thus that s.14A was inserted providing that no deduction shall be allowable in respect of expenditure incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e artifice too far. (emphasis is ours) 7.1 Though the assessment year before the Hon'ble Madras High Court was assessment year 2007-08, when the provisions of Rule 8D of the Rules were not applicable, so however, in its latter judgment in the case of Chettinad Logistics (P) Ltd., (supra) the said aspect has also been considered by the Hon ble High Court. The Hon'ble Madras High Court in Chettinad Logistics (P) Ltd., (supra) observed that the provisions of Rule 8D of the Rules does not come to the rescue of the Revenue in order to make disallowance under section 14A in the absence of any exempt income earned by the assessee in the relevant year. In our considered opinion, the aforesaid judgment of the Hon'ble Madras High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
