TMI Blog2018 (9) TMI 1985X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer to delete the addition. Ld. Departmental Representative has not brought any decision of the jurisdictional or any other High Court which is contrary to the decision of the Hon'ble Madras High Court as well as Gujarat High Court (supra). Therefore, we find no infirmity in the order passed by the ld.CIT(A). - Decided against revenue. - ITA No. 306 & 307/VIZ/2018, C.O. Nos. 89 & 90/VIZ/2018 (Arising out of ITA No. 306 & 307/VIZ/2018) - - - Dated:- 26-9-2018 - SHRI V. DURGA RAO, HON BLE JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, HON BLE ACCOUNTANT MEMBER For the Assessee : Shri G.V.N. Hari Advocate. For the Department : Shri K.S. Das Sr.DR ORDER PER V. DURGA RAO, JUDICIAL MEMBER The above captioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-company is engaged in the business of manufacturing of ferro alloys, filed its return of income declaring total income of ₹ 9,13,52,890/-. The return filed by the assessee was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). Subsequently, after following due procedure, assessment was completed under section 143(3) of the Act. In the assessment order, the Assessing Officer has noted that on verification of the audited balance sheet as on 31/03/2012, it is found that assessee has made huge investments, totalling to ₹ 21,00,44,300/- in shares of companies, income from which is exempt from tax. The Assessing Officer has asked the assessee to explain why the expenditure s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On appeal, ld. CIT(A) deleted the addition made by the Assessing Officer by following the decision of the ITAT, Visakhapatnam Bench in the case of DCIT Vs. Radha Krishna Automobiles in ITA No. 13/VIZ/2013, dated 22/11/2017. 5. Ld. Departmental Representative has relied on the order of the Assessing Officer. 6. On the other hand, ld. counsel for the assessee has submitted that the issue involved in this appeal is covered by the decision of the coordinate bench of the tribunal in the case of Radha Krishna Automobiles (supra) and the same was followed by ld. CIT(A), and prayed that order of the ld. CIT(A) may be upheld and the appeal filed by the Revenue may be dismissed. 7. We have heard both the sides, perused the material available ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Madras High Court in the case of M/s. Redington (India) Ltd. (Supra) has directed the Assessing Officer to delete the addition. A similar view has been taken by the coordinate bench of the tribunal in the case of D. Veerabhadra Reddy (HUF) vs. DCIT in ITA No. 263/VIZ/2014, by order dated 23/06/2017 for the Assessment Year 2009-10, wherein the Tribunal has held that no disallowance can be made when there is expenses incurred in relation to exempt income. The relevant portion of the order is extracted as under:- 6. We have heard the rival submissions and perused the material on record. The assessee has rental income from godowns and the business loss. The assessing officer has completed the assessment u/s 143(3) by order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the quantum of dividend income earned by the assessee. The Ld.AR submitted paper book enclosing the copy of statement of computation, return of income, balance sheet and profit and loss account. It is seen from the profit loss account and the statement of computation of income that the assessee has not derived any dividend income. When the assessee has no exempt income, the question of disallowance u/s l4A r.w.Rule 8D is not called for. The same view is expressed by the decision of Hon'ble Madras High Court in Redington (India) Ltd. Vs. Addl.CIT, 77 taxman.com 257, Hon'ble Delhi High Court in Chem Investments vs. CIT, 61 taxman.com 118 and the Hon'ble Gujrat High Court in Principal CIT vs Sintex Industries Ltd.,, 82 taxman.com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d ground where 40(a)(ia) disallowance has not been pressed as the issue has been decided by the Hon'ble Supreme Court in the case of Palam Gas Service dated 03.05.2017 against the assessee. Therefore, the second ground of appeal is dismissed. 9. We find that ld. CIT(A) by following the decision of the coordinate bench of the tribunal in the case of Radha Krishna Automobiles (supra), wherein the decisions of the Hon'ble Madras High Court in the case of Redington (India) Ltd., and Hon'ble Gujarat High Court in the case of Pr.CIT Vs. Sintex Industries Ltd., (82 taxman.com 171) have been followed, and held that there is dividend income and section 14A r.w.r. 18D of the IT Rules, 1962 has no application and directed the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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