TMI Blog2020 (3) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is not includible in total income. Since in the present case also, the assessee has not made any claim for exemption of any income from payment of tax, therefore while relying upon the decision(s) in the case of Cheminvest Ltd. vs. CIT(supra) and CIT vs. Corrtech Energy (P.) Ltd. [ 2014 (3) TMI 856 - GUJARAT HIGH COURT] we are also of the view that no disallowance u/s.14A of the Act ought to have been made by the Ld.AO. - Decided in favour of assessee. - I.T.A. No. 1658/Ahd/2018 - - - Dated:- 2-3-2020 - Shri Sandeep Gosain, Judicial Member And Shri Amarjit Singh, Accountant Member For the Appellant : Shri Ankit Chokshi, AR For the Responden : Shri G.c. Daxini, Sr.DR ORDER PER SHRI SANDEEP GOSAIN, JUDICIAL ME ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions submitted before us and the same is reproduced hereunder: Undisputedly interest expenditure was incurred for earning profit from the firms. The Hon'ble Special Bench of IT AT in the case of Vishnu Anand Mahajan Vs ACIT (2012) 137 ITD 189 (Ahd)(SB) has held that share income of the partner from partnership firms is not liable to be taxed u/s. 10(2A) and in such cases, provisions of Section 14A would apply to disallow expenditure incurred on earning such income. Accordingly, relying upon the binding decision of Hon'ble Special Bench of I TAT, I hold that the appellant is not entitled to claim interest expenditure incurred for earning exempt income from partnership firms. In view of the decision of Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns taken for investment towards capital in partnership firms namely Sandeep Enterprise, Gajanand Enterprise and Vallabh Enterprise. Copies of capital account of the appellant in the partnership firms were duly furnished to the Ld. A.O. and filed the revised statement of income considering interest received from partnership firm as income from business and profession and also claimed interest expenses under the head income from business and profession. Copy of revised statement of income is enclosed herewith at page no. 09 to 11 1.6. However the Ld. A.O. after considering the revised statement of income, disallowed the interest expenses u/s. 14A as the interest expenses claimed by the appellant under the head income from business or pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s upheld the order of the CIT(A) disallowing only 76% of expenses claimed proportionate to the exempt income and allowed the 24% of the expenses proportionate to the taxable income. While in the present case of your appellant, even if the ratio of the decision of the Hon'ble Special Bench is applied no deduction would be made as the appellant had not received any exempt income and accordingly expense proportionate to the exempt income will come to NIL only. 2.6. Further your appellant is submitting herewith the gist of decision of various courts and tribunals where it is held by the honourable courts and tribunals that disallowance u/s. 14A cannot be more than the exempt income 1. Pr. CIT Vs. GVK Projects and Technical Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of CIT v. Winsome Textile Industries Ltd. [2009] 319 ITR 204 held that Section 14A(1) provides that for the purpose of computing total income under chapter IV, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. In the instant case, the Tribunal has recorded the finding of fact that the assessee did not make any claim for exemption of any income from payment of tax. It was on this basis that the Tribunal held that disallwoance under section 14A could not be made. 2.10. In Pr.CIT Vs. Macdonald's India Pvt. Ltd. [2019] 101 taxmann.com 86 (Delhi), The A.O. noticed investments in assessee's books and invoked Section 14A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated by the Assessing Officer in his order from the firm and, therefore, in such circumstances, no disallowance was required to be made as per the provisions of section 14A of the Act. In this regard, Ld.AR relied upon the decision of Hon ble Gujarat High Court in the case of CIT vs. Corrtech Energy (P.)Ltd. reported in (2014) 45 taxmann.com 116/223 Taxman 761(Delhi). On the contrary, Ld.DR relied upon CBDT Circular No.5/2014 dated 11th February-2014 and decision of ITAT Amritsar in the case of Lally Motors India (P.)Ltd. vs. Pr.CIT passed in ITA No.218(Asr)/2017 for AY 2012-13, dated 12/04/2018. 9.1. After having gone through the facts of the present case and also having taken into consideration the legal proposition as mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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