TMI Blog2021 (1) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income.' The provision this is clearly relatable to the earning of actual income and not notional or anticipated income. The submission of the Department to the effect that s.14A would be attracted even to exempt income 'includable' in total income would entail the assessment of notional income, assumed to be exempt in the future, in the present assessment year. The computation of total income in terms of s.5 of the Act is on real income and there is no sanction in law for the assessment of admittedly notional income, particularly in the context of effecting a disallowance in connection therewith. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sisted by Mr.N.V.Narayanan, learned counsel appearing for the appellant and Mr.Karthik Ranganathan, learned Standing Counsel assisted by Mr.Rajesh Sivanandham, learned Junior Standing Counsel appearing for the respondent/Revenue. 4. It is not disputed that the issue involved in this case is squarely covered by the decision of the Hon'ble Division Bench of this Court in the case of Marg Ltd. Vs. CIT [reported in (2020) 120 Taxmann.com 84], in which, the decision rendered by us in TCA. Nos.732 and 733 of 2018 dated 07.7.2020 [CIT Vs. Tidel Park Ltd.] was followed. The relevant portions of the judgment in the case of Marg Ltd., read as hereunder : 9. A Co-ordinate Bench of this Court, in the case of CIT v. Tidel Park Ltd. [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in issue. The order of assessment records a finding of fact to that effect. The issue to be decided thus lies within the short compass of whether a disallowance in terms of s.14A of the Act read with rule 8D of the Rules can be contemplated even in a situation where no exempt income has admittedly been earned by the assessee in the relevant financial year. 7. Per contra, Sri.T.Ravikumar appearing on behalf of the revenue drew our attention to the marginal notes of s.14 A pointing out that the provision would apply not only where exempted income is 'included' in the total income, but also where exempt income is 'includable' in total income. 8. He relied upon a Circular issued by the Central Board of Direct taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-tax v. Walfort Share and Stock Brokers (P) Ltd. [2010] 326 ITR 1' .... The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income.' 10. The provision this is clearly relatable to the earning of actual income and not notional or anticipated income. The submission of the Department to the effect that s.14A would be attracted even to exempt income 'includable' in total income would entail the assessment of notional income, assumed to be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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