TMI Blog2019 (4) TMI 1738X X X X Extracts X X X X X X X X Extracts X X X X ..... ramin Bank Vs. Joint Commissioner of Income-tax [ 2018 (6) TMI 1283 - KARNATAKA HIGH COURT] has held that expenditure in relation to income not includable in the total income cannot exceed such income. We reverse the decision of the Tribunal to the extent of limiting the disallowance under Section 14A. - Decided in favour of assessee. - INCOME TAX APPEAL NO.149 OF 2017 - - - Dated:- 23-4-2019 - MR AKIL KURESHI AND MR SARANG V. KOTWAL, JJ. For The Appellant : Ms. A. Vissanji a/w Mr. S. J. Mehta For The Respondent : Mr. N. C. Mohanty ORDER P. C. : - 1. The Appeal is admitted for consideration of the following substanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exceed the exempt income earned by the Assessee during the relevant year. She submitted that if such disallowance, therefore, is restricted to ₹ 1,13,72,545/which is exempt income earned by the Assessee, the Assessee would accept the same. 5. Having heard the learned Counsel for the parties and having perused the documents on record, consistently different High Courts in the country have taken a view that the disallowance under Section 14A of the Act read with Rule 8D of the Rules cannot exceed the Assessee's exempt income. The Delhi High Court, in the case of Cheminvest Ltd. Vs. Commissioner of Income Tax 378 ITR 33 , has held that when the Assessee has not earned any income which was exempt from tax, disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reasonable and close nexus with the factually incurred expenses. It is not deemed disallowance under Section 14A of the act but an enabling provision for assessing authority to compute the same on the given facts and figures in the regularly maintained Books of Accounts. The assessing authority also could not have called upon the Assessee himself to undertake the exercise of computing the disallowance under Section 8D of the Rules. Such abdication of duty is not permissible in law. Since no such exercise has been undertaken by the assessing authority, the case calls for a remand. 7. Gujarat High Court, in the case of Commissioner of IncometaxI Vs. Corrtech Energy (P.) Ltd. [ 2015] 372 ITR 97 , has held a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss purpose and not for diverting the same to sister concern without having nexus with the business. The observations made therein have to be read in that context. In the present case, admittedly the assessee did not make any claim for exemption. In such a situation section 14A could have no application. 5. We do not find any question of law arising. Appeal is therefore dismissed. 8. Recently, this Court, in a decision dated 4th February, 2019, in the case of The Pr. Commissioner of Income Tax10 Vs. HSBC Invest Direct (India) Ltd. had observed as under. 4. Having heard learned Counsel for the parties and perused documents on record, we notice that in Cheminvest Ltd. (supra) D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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