TMI Blog2020 (10) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the Central Board of Direct Taxes which clearly provides that disallowance under Section 14A of the Act read with Rule 8D has to be made even when the tax paid for a particular year is not earned in exempt income, the substantial question of law framed by this Court is answered in negative and in favour of revenue. Order of the Tribunal insofar as it pertains to disallowance under Section 14A of the Act read with Rule 8D of the Income Tax Rules is hereby quashed. - I.T.A. NO.100 OF 2015 - - - Dated:- 29-9-2020 - HON BLE MR. JUSTICE ALOK ARADHE AND HON BLE MR. JUSTICE M.I. ARUN APPELLANTS (BY SRI. K.V. ARAVIND, ADV.) RESPONDENT: (RESPONDENT SERVED AND UNREPRESENTED) JUDGMENT ALOK ARADHE J., Mr. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 519.61 crores as on 31.03.2007 whereas it was ₹ 1507.39 crores as on 31.03.2008 and substantial investments have been made in the shares of Avantis Pharma Limited, Kingfisher Airlines Ltd., Kingfisher Aviation Training Ltd., United Spirits Ltd. and also Deccan Aviation Ltd. It was further held that the money borrowed has found its way directly to the investments and as the assessee does not have any other major business other than investments, therefore, the claim towards interest payment is directly related to the investments. The Assessing Officer, therefore, disallowed the interest expenditure of ₹ 57,92,44,082/- under Section 14A of the Act read with Rule 8D of the Income Tax Rules. The aforesaid order was affirmed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down by the Supreme Court in MAXOPP INVESTMENT LIMITED VS. COMMISSIONER OF INCOME TAX, NEW DELHI (2018) 402 ITR 640 (SC) as well as Circular No.5/2014 dated 11.02.2014 issued by the Central Board of Direct Taxes. 5. We have considered the submissions made by the learned counsel for the revenue and have perused the record. From perusal of paragraph 10 of the order passed by Tribunal, it is evident that the Tribunal has held that since the assessee had not received any dividend on the investment and since there was no earning to exempt income, therefore, there can be no disallowance under Section 14A of the Act. The aforesaid issue is no longer res-integra and is covered by the decision of the Supreme Court in MAXOPP INVESTMEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continue to hold those shares as it wants to retain control over the investee company. In that case, whenever dividend is declared by the investee company that would necessarily be earned by the assessee and the assessee alone. Therefore, even at the time of investing into those shares, the assessee knows that it may generate dividend income as well and as and when such dividend income is generated that would be earned by the assessee. In contrast, where the shares are held as stock-in-trade, this may not be necessarily a situation. The main purpose is to liquidate those shares whenever the share price goes up in order to earn profits. In the result, the appeals filed by the Revenue challenging the judgment of the Punjab and Haryana H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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