TMI Blog2021 (6) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... A No. 7128 & 7129/Mum/2019 - - - Dated:- 2-6-2021 - Shri S Rifaur Rahman, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Appellant : Shri Rajesh Mishra, DR For the Respondent : None ORDER PER PAVAN KUMAR GADALE, JM: These are the two appeals filed by the revenue against the separate orders of the Commissioner of Income Tax (Appeals) -18 Mumbai, passed u/s. 143(3) and 250 of the Act. Since the issues involved in the appeals are identical and similar, hence they are clubbed, heard and consolidated order is passed. For the sake of convenience we shall take up the ITA No. 7128/Mum/2019 for the A.Y 2015-16 as a lead case and the facts narrated therein. The revenue has raised the following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanations mentioning that the investments are made for business operations of the company being strategize in associates and infrastructure is not required to regulate the investments. But the A.O. was not satisfied with the explanations and finally considering the investments made by the assessee has worked out the disallowance u/sec14A r.w.r 8D(2)(iii) of the IT Rules of ₹ 8,67,37,238/-and assessed the total loss of ₹ 22,96,80,592/- and passed order u/s 143(3) of the Act dated 29.12.2017. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), the CIT(A) considered the grounds of appeal, submissions of the assessee and the Assessing officer findings. The appellate Authority on perusal of the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst addition of ₹ 8,67,37,238/- u/s 14A r.w.r.8D. In para 4 of the assessment order the Ld. AO has mentioned that it was observed from the balance sheet for AX, 2015-16 that the appellant company had made investment in the shares on which the appellant is likely to earn exempt income. According to the AO provision of section 14A r.w.r.8D were applicable and the appel lant company had failed to make any disallowance u/s 14A r.w.r.8D. In view of it the Ld. AO worked out a disallowance of ₹ 8,67,37,238/- u/s 14A r.w.r.8D, 6.2 I have considered the submissions of the appellant and perused the materials available on record. During the course of the appellate proceedings, it was submitted that the appellant had earned no exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished on 17th August, 2018 has held as follows: On hearing the learned Counsel for the Department and on a perusal of the impugned orders, it appears that both the Authorities have recorded a clear f inding of fact that there was no exempt income earned by the appellant. While holding so, the Authorities relied on the judgment of the Delhi High Court in Income Tax Appeal No. 749/2014, which holds that the expression does not form part of the total income in Section 14A of the Income Tax Act, 1961 envisages that there should be an actual receipt of the income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. The Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r receivable during the relevant previous year. 6.4.4 The jurisdictional Mumbai ITAT in the case of Kamat Hotels (India) Ltd vs DCIT has held that 2.5.1 We are of the considered view that the legislative intent is more discernible in the judicial decisions. In Chettinad Logistics (P.) Ltd. (supra), the Hon'ble Madras High Court has held that section 14A cannot be invoked where no exempt income was earned by the appellant in the relevant assessment year. In the case of CIT v. Shivam Motors (P.) Ltd. [2015] 55 taxmann.com 2621230 Taxman 63 (All.), it has been held that in absence of any tax free income earned by the appellant, disallowance u/s. 14A could not be made. In a similar vein, it has been held in Cheminvest Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es or information but relied only on the order of the A.O. We found that the CIT(A) has relied on the findings in the assessment order and observed that there is no exempt income received by the assessee and relied on the provisions of Sec. 14A r.w.r 8D of the IT Rules. Further CIT(A) emphasized that the provisions of Sec.14A of the Act shall not be applicable where there is no exempt income received and strengthened his order relying on the Hon ble High Court and Hon ble Tribunal decisions and passed a reasoned order. Accordingly, we are not inclined to interfere with the order of the CIT(A) and uphold the same and dismiss the grounds of appeal of the revenue. 6. In the result the appeal filed by the revenue is dismissed. ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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