TMI Blog2017 (5) TMI 1751X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion that the CIT(Appeals) has rightly deleted the disallowance made by the AO u/s 14A - assessee ha not earn any income from the investment. Therefore, in view of this the judgment of Madras High Court in Redington (India) Ltd. [ 2017 (1) TMI 318 - MADRAS HIGH COURT ] there cannot be any disallowance at all. Bogus purchases - AO disallowed the claim of the assessee only on the ground that the TIN registration was cancelled by State Commercial Tax Department on 22.02.2013 - HELD THAT:- AO has not made any independent verification with regard to existence of R.N. Enterprise and Nakoda Agency. It is also not the case of the Revenue that the assessee has no stock as claimed. When the existence of stock or availability of pen, pencil, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2. The only issue arises for consideration is disallowance made by the Assessing Officer under Section 14A of the Income-tax Act, 1961 (in short 'the Act') read with Rule 8D of the Income-tax Rules, 1962. 3. Shri Supriyo Pal, the Ld. Departmental Representative, submitted that the entire investment was made by the assessee in the group concern for the purpose of business. Moreover, no income was earned during the assessment year 2011-12. According to the Ld. D.R., the CIT(Appeals) restricted the disallowance to the extent of ₹ 1,70,216/- to the extent of interest payment made by the assessee for the assessment year 2011-12. According to the Ld. D.R., disallowance has to be computed as per the method prescribed under Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. representative for the assessee, submitted that the tax effect involved in the case for assessment year 2011-12 is less than ₹ 10,00,000/-, therefore, the appeal for assessment year 2011-12 is not maintainable before the Tribunal. For the assessment years 2012-13 and 2013-14, the investment was made only in subsidiary company, namely, SNJ Sugars Pvt. Ltd. for the purpose of business. According to the Ld. representative, at no point of time, the investment was made for the purpose of earning any exempted income. Since the investment was made in SNJ Sugars Pvt. Ltd., which is admittedly a subsidiary company of the assessee, according to the Ld. representative, it is only a strategic investment for the purpose of business of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2013-14, it is not in dispute that the investment was made in SNJ Sugars Pvt. Ltd., which is a subsidiary company of the assessee-company. When the investment was made by the assessee-company in its subsidiary company for the purpose of business, this Tribunal is of the considered opinion that such investment was only for commercial expediency and it has to be construed as strategic investment. In other words, the investment made by the assessee was for business purpose. Therefore, as rightly observed by the CIT(Appeals), the strategic investment made in the subsidiary company cannot be considered for disallowance under Section 14A of the Act. Therefore, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, the assessee purchased pen, pencil, gift packs, etc. from R.N. Enterprise and Nakoda agency. Merely because the TIN was cancelled by Commercial Tax Department of State Government, according to the Ld. representative, it cannot be concluded that the assessee has not purchased anything from the above two business concerns. The fact that the above said two business concerns were carrying on business even after cancellation of TIN registration, was established by the fact that they sold pen, pencil, gift items to the assessee, therefore, according to the Ld. representative, the CIT(Appeals) has rightly allowed the claim of the assessee. 11. We have considered the rival submissions on either side and perused the relevant material av ..... X X X X Extracts X X X X X X X X Extracts X X X X
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