TMI Blog2019 (4) TMI 1731X X X X Extracts X X X X X X X X Extracts X X X X ..... ffered by assessee because there is no exempt income and once there is no exempt income no disallowance can be made relatable to exempt income by invoking the provisions of section 14A read with Rule 8D of the Rules. - Decided in favour of assessee. - CO No. 128/Mum/2019, ITA No. 6269/Mum/2017 (Assessment Year 2013-14) - - - Dated:- 15-4-2019 - Sri Mahavir Singh, Jm And Sri Rajesh Kumar, Am Appellant by : Shri Chaudhary Arun Kumar Singh, Respondent by : Shri Anuj Kisnadwala, AR ORDER Mahavir Singh, These cross appeals filed by the assessee are arising out of the order of Commissioner of Income Tax (Appeals)-22, Mumbai [in short CIT(A)], Appeal No. CIT(A)-22/IT/504/2015-16 vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of ₹ 7500 and which was claimed as exempt under section 10(34) of the Act. The assessee has made suo moto disallowance for earning of this exempt income at ₹ 7,50,000/-. But the AO invoked the provisions of section 14A of the Act read with Rule 8D and thereby disallowed the expenses relatable to interest expenses under Rule 8D(2)(ii) at ₹ 89,22,483/- and under Rule 8D(2)(iii) being administrative expenses at ₹ 7,50,250/-. Accordingly, the AO computed the total disallowance under Rule 8D(2)(ii) and 8D(2)(iii) at ₹ 96,72,733/-. The AO after reducing the disallowance suo moto made by assessee at ₹ 7,50,000/- made addition to the returned income at ₹ 89,22,733/-. Aggrieved, assessee preferred the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 ITR 33 (Del) had also held as under: 23. In the context of the facts enumerated hereinbefore the Court answers the question framed by holding that the expression 'does not form pail of the total income in Section 14A of the envisages that there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year. In view of the legal position on the issue as discussed above and also the fact that the appellant's own interest free funds are in excess of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant case also, the assessee has made voluntary disallowance u/s 14A of the Act even though it did not receive any dividend income. As per the decisions rendered by various courts, no disallowance is required to be made in the absence of exempt income. Hence the assessee has filed CO with the plea to delete the voluntarily disallowance made by it, which is supported by various decisions referred above. Accordingly, we allow the CO filed by the assessee. The relief granted to the assessee in CO may reduce the assessed income, which may also go below the returned income. This issue, i.e, whether the assessed income can go below the returned income (which was urged by Ld DR), has been examined and decided in favour of the assessee by the co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in relation to the said income. The Income Tax Appellate Tribunal held that the provisions of Section 14A of the Income Tax Act, 1961 would not apply to the facts of this case as no exempt income was received or receivable during the relevant previous year. It is not the case of the Assessing Officer that any actual income was received by the assessee and the same was includible in the total income. In the facts of the case, the Authorities held that since the investments made by the assessee in the sister concerns were not the actual income received by the assessee, they could not have been included in the total income. 6. Once there is no exempt income, the issue is squarely covered by the decision of Hon ble Bombay High ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
