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TMI Blog2016 (2) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... de certain investments in shares of some group companies and had debited expenditure of Rs. 2,77,43,665/- on account of financial expenses/interest. After invoking the provisions of section 14A of the Act read with Rule 8D of the Income Tax Rules, a disallowance of Rs. 23,12,772/- was made by the Assessing Officer. 3. Before the learned CIT (Appeals), the assessee submitted that he has not claimed any exempt income in his Profit & Loss Account or in the return of income, therefore, the disallowance under section 14A of the Act cannot be made in view of the judgment of the Hon'ble Punjab & Haryana High Court in the case of Lakhani Marketing Ltd. vide order dated 2..4.2014 in ITA No.970 of 2008. After considering the submissions of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al on or before the disposal of the same." 5. The learned counsel for the assessee submitted before us that since no tax-free income has been earned by the assessee during the relevant assessment year, no disallowance under section 14A of the Act can be made. Reliance was placed on the judgment of Punjab & Haryana High Court in the case of Lakhani Marketing Ltd. (supra), Delhi High Court in the case of CIT Vs. Holcim India Pvt. Ltd. (2014) ITA No.486 of 2014 and a copy of latest order of the I.T.A.T., Chandigarh Bench in the case of M/s BCL Industries & Infrastructures Ltd. in ITA No.1002/Chd/2013 dated 13.1.2016 was also filed in this regard. 6. The learned D.R. relied on the order of the lower authorities and further placed reliance on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 2014 dated 5.9.2014 has also held the same. Though the judgments are for assessment year prior to the assessment year 2008-09, i.e. the year in which Rule 8D of the Income Tax Rules was brought in the Income Tax Rules. But the proposition laid down by the Hon'ble High Court is with regard to section 14A of the Income Tax Act, which is to be applied even after the insertion of Rule 8D of the income Tax Rules. It is a trite law that the provisions of Act prevail over the Rules. Once the taxability of an amount is decided as per the provisions of the Act, only then a Rule can be invoked. Rule 8D of the Income Tax Rules is just a machinery or a method provides to compute the disallowance under section 14A of the Act, if any. Therefore, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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