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TMI Blog2021 (4) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 20.02.2015 passed by the Income Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' for short). I.T.A.No.398/2015 arises from the order of the tribunal by which appeal preferred by the revenue has been dismissed whereas, I.T.A.No.399/2015 has been preferred against the order of the tribunal by which the tribunal has allowed the cross objection preferred by the assessee. The subject matter of the appeals pertain to the Assessment year 2009-10. The appeals were admitted on the following substantial question of law: Whether on the facts and in the circumstances of the case, the tribunal is justified in law in deleting the disallowances made under Section 14A r.w.r 8D(2)(ii) and 8D(2)(iii) of the Act, withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal preferred by the assessee was partly allowed. The revenue filed an appeal, whereas, the assessee filed a cross objection against the order of the Commissioner of Income Tax (Appeals) before the tribunal. The tribunal by its common order dated 20.02.2015 dismissed the appeal preferred by the revenue and allowed the cross objection preferred by the assessee. In the aforesaid factual background, these appeals have been filed. 4. Learned counsel for the revenue submitted that the Assessing Officer has rightly added the exempted dividend income by applying Rule 8D(2)(ii) and held that the assessee had made investment and claimed the entire dividend income to be exempt from tax. It is also argued that the tribunal erred in deleting the dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are far in excess of the investments made as held by the tribunal as well as the Commissioner of Income Tax (Appeals) the income therefrom, if any, is exempt under the provisions of the Act and the presumption arises that such investments have been made from capital and reserves of the company and also from other non interest bearing funds. It is also submitted that the Circular No.5/2014 dated 11.02.2014 does not apply to the fact situation of the case as the subject matter of the appeal pertains to Assessment Year 2009-10. In support of aforesaid submissions, reliance has been placed on 'CIT VS. RELIANCE UTILITIES & POWER LTD.', (2009) 313 ITR 340 (BOM.), 'CIT VS. MICROLABS LTD', (2016) 383 ITR 490 (KAR.), 'CIT VS. LA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome as envisaged under Rule 8D(1) of the Rules. There is no positive material to show that the assessee had incurred such expenditure to earn exempt income. The Commissioner of Income Tax (Appeals) and the tribunal therefore, have rightly deleted the disallowance under Section 14A read with Rule 8D of the Rules. The Circular No.5/2014 dated 11.02.2014 has no application to the facts of the case as the Assessment Year in question is 2009-10.
In view of preceding analysis, the substantial question of law framed by a bench of this court is answered against the revenue and in favour of the assessee.
In the result, we do not find any merit in these appeals, the same fails and are hereby dismissed. X X X X Extracts X X X X X X X X Extracts X X X X
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