TMI Blog2018 (11) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... on sale of goods to its customers, Section 194C of the Act is not applicable. Therefore, provisions of section 40(a)(ia) applied by the A.O. is not justified. Entire addition have been deleted. - Decided in favour of assessee. Addition u/s 14A - absence of any expenditure shown for earning dividend income - Held that:- As onus is upon A.O. to record satisfaction that interest bearing funds have been used for investment to earn tax free income”. Since no borrowed funds have been used by assessee to make investment, therefore, Ld. CIT(A) correctly deleted the addition - Decided in favour of assessee. - ITA. No. 2809/Del./2015 - - - Dated:- 1-11-2018 - SHRI BHAVNESH SAINI, J.M. AND SHRI L.P. SAHU, A.M. For The Revenue : Smt. Naina S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowable under section 40 (a) (ia) of I.T. Act as provisions of Section 194C would apply in this case. 4.1. Ld. CIT(A) considering the various decisions cited by the assessee-company before him and considering the Explanation-III to Section 194C of the I.T. Act noted that the transactions relate to sale of material which cannot be termed as contract for work and labour. Hence, Section 194C is not applicable in assessee s case. Ld. CIT(A) also noted that since assessee had paid VAT on sale of goods to its customers, Section 194C of the Act is not applicable. Therefore, provisions of section 40(a)(ia) applied by the A.O. is not justified. Entire addition have been deleted. 5. Learned Counsel for the Assessee, at the outset, submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 68,288/-. Part of this ground was allowed. 8. After considering the rival submissions, we do not find any merit in this ground of appeal of Revenue. Learned Counsel for the Assessee relied upon decision of Hon ble Punjab and Haryana High Court in the case of CIT vs. Metalman Auto (P) Ltd., (2011) 336 ITR 434 (P H) in which it was held that in the absence of any expenditure shown for earning dividend income, disallowance under section 14A was not justified . The assessee contended that no borrowed funds have been used for purchase of investment have not been rebutted by the Revenue through any evidence or material on record. The Hon ble Punjab and Haryana High Court in the case of Abhishek Industries Ltd., 380 ITR 652 held t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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