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The ACIT, Central Circle- 17, New Delhi Versus M/s. Sainik Mining and Allied Services Ltd. And Vice-Versa

2017 (12) TMI 362 - ITAT DELHI

Addition u/s 14A r.w.r. 8D - Held that:- No merit in the Departmental Appeal on this issue. It is not in dispute that assessee-company has not earned any dividend income in assessment years under appeal. The Hon’ble Delhi High Court in the case of Cheminvest Ltd., vs. CIT-VI, New Delhi (2015 (9) TMI 238 - DELHI HIGH COURT ) has held that if there is no exempt income, there can be no question of making any disallowance under section 14A of the I.T. Act - Addition on the basis of the seized ma .....

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ed documents in reference to the books of account, correctly deleted the addition. - Addition on account of unexplained cash found during search - Held that:- No merit in this ground of appeal of the Revenue. The assessee -company explained the availability of the cash found during the course of search as available to the assessee-company and the group companies at the time of search which were duly reflected in the books of account, confirmation of the availability of the cash were filed, .....

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Shri Karan Kumar, Advocates ORDER PER BHAVNESH SAINI, J.M. The Department Appeals as well as cross objections of the assessee are directed against the common order of the Ld. CIT(A)-27, New Delhi, dated 29th October, 2015, for the A.Ys. 2012-2013 and 2013-2014. 2. We have heard the Learned Representatives of both the parties and perused the material on record. 3. The assessee filed both the cross-objections mainly in support of the order of the Ld. CIT(A). The same are therefore, dismissed. 4 Bo .....

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es attributable for earning this income and also to quantify the disallowance under section 14A read with Rule 8D of the I.T. Rules. The assessee-company submitted before A.O. that assessee-company has not earned any dividend income and as such, question of incurring of expenditure does not arise. The A.O. however, noted that by not earning of income does not mean non-incurring of expenses. There might be huge amount of expenses which could not result into earning of income. Further, presently, .....

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ons made before A.O. that assessee-company has not earned any dividend income in the years under appeal. In addition to the above, the assessee-company relied upon the decision of the Hon ble Delhi High Court in the case of Cheminvest Ltd., vs. CIT-VI, New Delhi 378 ITR 33 in which it was held that Section 14A will not apply if no exempt income is received or receivable during the relevant previous year. 5.2. The Ld. CIT(A) considering the explanation of assessee-company noted that Section 14A c .....

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e of earning of income in reference. The tax statute is to be considered strictly. Section 14A(1) is the basic and primary provision, which provides for disallowance of an expenditure incurred in relation to exempt income. The A.O. has rightly disallowed the claim of expenditure pertaining to exempt income within the ambit of Law and provisions of Income Tax Act. The Ld. D.R. also filed the written submissions in which certain case Law have been relied upon. 5.4. On the other hand, the Learned C .....

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is covered in favour of the assessee-company. 6. After considering the rival contentions, we do not find any merit in the Departmental Appeal on this issue. It is not in dispute that assessee-company has not earned any dividend income in assessment years under appeal. The Hon ble Delhi High Court in the case of Cheminvest Ltd., vs. CIT-VI, New Delhi (supra) has held that if there is no exempt income, there can be no question of making any disallowance under section 14A of the I.T. Act. The Ld. C .....

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avour of the assessee by the order of the ITAT as well as judgment of the Hon ble Delhi High Court in the case of Cheminvest Ltd., vs. CIT-VI, New Delhi (supra). The contention of the Ld. D.R. therefore, rejected. Grounds No.1 and 2 of appeals of the Revenue in both the appeals are dismissed. Issue No.1 is decided against the Revenue. ISSUE No.2 7. In A.Y. 2012-2013, the Revenue on ground No.3 challenged the deletion of addition of ₹ 69,61,660 made on the basis of the seized material. In t .....

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(assessee). The financial implication of the same were already taken in F.Y. 2011-2012 in the books of account of the assessee-company. Copy of the bank statement reflecting receipt of ₹ 68,00,540 was filed before A.O. However, the A.O. was not satisfied with the explanation of assessee-company and noted that the seized document reveal that document is on loose sheet, contains certain calculations, partly written by pen and partly by pencil. The assessee-company has admitted ownership of t .....

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tten submissions before Ld. CIT(A) which is reproduced in the appellate order in which the assesseecompany briefly explained that seized paper shows the amount of the work done of ₹ 57,21,735.60 and service tax of ₹ 12,39,934. The gross total of which is ₹ 69,61,669.60. Central Coal Field Ltd., paid ₹ 68,00,564 after deducting ₹ 1,61,105 on account of statutory dues of TDS etc., This amount of ₹ 68,00,564 was received in ICICI Bank Ltd., by assessee-company on .....

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ected in the books of account. It was, therefore, submitted that addition may be deleted. The Ld. CIT(A) considering the explanation of assessee-company found that entries in the seized document duly reflected in the books of account of the assessee-company and accordingly, deleted the addition. 7.1. The Ld. D.R. relied upon the order of the A.O. and submitted that no supporting documents were filed before A.O. Ld. D.R. relied upon the decision of the Hon ble Supreme Court in the case of Keshav .....

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seized document, have been duly explained by assessee-company before the authorities below and all the entries in the seized document are reflected in the books of account. The payments received from Central Coal Field Ltd., have been mentioned in the bank account of the assessee12 company and payments mentioned in the seized documents have been made to the three parties. The Ld. CIT(A) therefore, on proper appreciation of all the seized documents in reference to the books of account, correctly .....

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; 6,47,000 was found. This amount pertains to 03 companies i.e., assessee, Sainik Finance & Industries Limited (SFIL) and M.P. Sainik Coal Mining Private Limited (MPSCMPL). Copy of the cash book and confirmations were filed. The A.O. was not satisfied with the explanation of assessee-company because cash of ₹ 6,47,000 was found from Gurgaon Office of the assessee-company and as per cash book, balance is available of ₹ 3,49,216 only. Other group companies are having their office a .....

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