9911796707
TMI Blog2019 (2) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 2014-15 on the grounds inter alia that :- "1. (i) That on facts and circumstances of the case, the ld. CIT(A) was not justified in passing ex-parte order and dismissing the appeal of the assessee without proper opportunity and adjudication in terms of provisions of section 250(4) of the Income Tax Act, 1961. (ii) That in the absence of proper and reasonable opportunity, the impugned order is passed in contravention to principels of natural justice and not sustainable under the law. 2. That on facts and circumstances of the case, the ld. CIT(A) was not justified in confirming disallowance of Rs. 6,64,325/- u/s 14A read with rule 8D in total disregard to facts of the case that appellant has not earned any dividen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case. 6. Undisputedly assessee has not earned any dividend / exempt income during the year under assessment on the investment made by it as is apparent from auditor's report placed on file by the assessee. It is also not in dispute that AO without recording dissatisfaction as to the working out made by the assessee that no expenses have been incurred nor earned any dividend / exempt income, proceeded to invoke the provisions contained u/s 14A read with Rule 8D in a mechanical manner. 7. Hon'ble Delhi High Court in case cited as CHEMINVEST LTD. vs. Commissioner of Income Tax [2015] 378 ITR 33 (Delhi) while interpreting applicability of Section 14A held as under : " that no exempted income was earned by the assessee in the relevant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfied with the claim of the assessee with regard to the expenditure or no expenditure, as the case may be, the Assessing Officer is to accept the claim of the assessee in so far as the quantum of disallowance under section 14A is concerned. In such eventuality, the Assessing Officer cannot embark upon a determination of the amount of expenditure for the purposes of section 14A(1). In case, the Assessing Officer is not, on the basis of the objective criteria and after giving the assessee a reasonable opportunity, satisfied with the correctness of the claim of the assessee, he shall have to reject the claim and state the reasons for doing so. Having done so, the Assessing Officer will have to determine the amount of expenditure incurred in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above and by following the law laid down by Hon'ble Apex Court and High Courts in judgments cited as CHEMINVEST LTD., Godrej & Boyce Manufacturing Company Ltd. (supra) and Maxopp Investment Ltd. (supra), we are of the considered view that the findings returned by AO that, making disallowance u/s 14A by the AO by relying upon CBDT Circular dated 05/2014 dated 11.02.14 that disallowance u/s 14A is to be made even if no exempt income has earned during the year under consideration, is no longer a good law because where the assessee has not earned any dividend income forming part of the total income during the year under assessment, section 14A read with Rule 8D is not attracted. So making disallowance u/s 14A read with Rule 8D in a mechanic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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