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TMI Blog2015 (9) TMI 1699X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act r.w.s. 8D of Income Tax Rules. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of AO in making disallowance of Rs. 2,21,204/- u/s. 14A r.w.s. 8D is bad in law and against the facts and circumstances of the case. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of AO in charging the interest u/s./ 234B of the I.T. Act, 1961. 4. That the appellant craves to leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 2. At the outset, Ld. Counsel for the assessee submitted that the assessee had not earned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when no exempt income was earned. I find that the case of assessee is fully covered in its favour by the order of the ITAT, Delhi 'E' Bench, decided in the case of M/s Mayank Auto Engineers P Ltd. vs. DCIT (Supra) as well as the decision of the Hon'ble Delhi High Court in the case of CIT Vs Holcim India Pvt. Ltd. (Supra) wherein, the Hon'ble High Court under similar circumstances has held as under: "13. We are confused about the stand taken by the appellant-Revenue. Thus, we had asked Sr. Standing Counsel for the Revenue, to state in his submission raised was that the shares would have yielded dividend, which would be exempt income and therefore, the CIT(A) had invoked Section 14A to disallow the entire expenditure. The aforesaid subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on it has been held: "As regards the second question, Section 14A of the Act provides that for the purposes of computing the total income under the Chapter, 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. Hence, what Section 14A provides is that if there is any income which does not form part of the income under the Act, the expenditure which is incurred for earning the income is not an allowable deduction. For the year in question, the finding of fact is that the assessee had not earned any tax free income. Hence, in the absence of any tax free income, the corresponding expenditure could not be worked out for disallowance. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness was set up and had commenced. The said finding is accepted. The respondent-assessee, therefore, had to incur expenditure for the business in the form of investment in shares of cement companies and to further expand and consolidate their business. Expenditure had to be also incurred to protect the investment made. The genuineness of the said expenditure and the fact that it was incurred for business activities was not doubted by the Assessing Officer and has also not been doubted by the CIT(A). 17. In these circumstances, we do not find any merit in the present appeals. The same are' dismissed in limine." 5. I have already noted that assessee had not earned any exempt income during the year and therefore, following the above or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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