TMI Blog2021 (4) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... me was earned by the assessee during the year, no disallowance is called for under section 14 A of the Act. For these reasons, we uphold the findings of the Ld. CIT(A) and dismiss the grounds of appeal of the Revenue. - ITA No. 797 & 798/Del/2018 - - - Dated:- 10-3-2021 - Shri Prashant Maharishi, Accountant Member And Shri K. Narasimha Chary, Judicial Member For the Appellant : Sh. Rajesh Kumar, Sr. DR For the Respondent : None ORDER PER SHRI PRASHANT MEHARISHI, AM: Aggrieved by the orders dated 23/11/2017 in Appeal Numbers 147 and 369/16-17 passed by the learned Commissioner of Income Tax (Appeals)- 27, Delhi ( Ld. CIT(A) ) in the case of Era Infrastructure (India) Ltd ( the assessee ) for the assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is likely to earn the dividends and because the assessee incurred some expenditure in the investment which will early exempt income, such part of expenditure allocatable to the investment has to be disallowed. 5. When the matter is called, neither the assessee nor any authorised representative entered appearance. It could be seen from the record that the notice sent to the address given in form No. 36 is returned with the endorsement of the postal servant that the addressee left. If the assessee is available in such address, such notice should have been served on the assessee. If for any reason, the assessee is not available there, it is for the assessee to make arrangements for service of such notice by furnishing the address where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven when exempt income was not earned in a particular AY. According to him, the other decisions of this Court in CIT-IV v. Taikisha Engineering India Pvt. Ltd. [2015] 370 ITR 338 (Del) and CIT-IV v. Holcim India Pvt. Ltd. (2014) 272 CTR (Del) 282 did not actually discuss the above Circular of the CBDT and, therefore, would be distinguishable. 10. Mr. Hossain further submitted that there was nothing in Section 14A of the Act which suggested that exempt income had to necessarily be earned in the AY in question for the applicability of the said provision. He submitted that if the interpretation placed on Section 14 A of the Act by the above CBDT Circular was not accepted, the very purpose of Section 14A would be defeated. He referred to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 14A is clearly relatable to the earning of the actual income and not notional income or anticipated income. It was further explained that, The computation of total income in terms of Rule 8D is by way of a determination involving direct as well as indirect attribution. Thus, accepting the submission of the Revenue would result in the imposition of an artificial method of computation on notional and assumed income. We believe thus would be carrying the artifice too far. 21. The decisions in CIT v. M/s Lakhani Marketing Inc. 2014 SCC Online P H 20357, CIT v. Winsome Textile Industries Limited [2009] 319 ITR 204 (P H), CIT v. Shivam Motors (P) Ltd. (2014) 272 CTR (All) 277 have all taken a similar view. The decision in Taikish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusively for the purpose of making or earning income. It is the purpose of the expenditure that is relevant in determining the applicability of s. 57(iii) and that purpose must be making or earning of income. s. 57(iii) does not require that this purpose must be fulfilled in order to qualify the expenditure for deduction. It does not say that the expenditure shall be deductible only if any income is made or earned. There is in fact nothing in the language of s. 57(iii) to suggest that the purpose for which the expenditure is made should fructify into any benefit by way of return in the shape of income. The plain natural construction of the language of s. 57(iii) irresistibly leads to the conclusion that to bring a case within the section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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