TMI Blog2021 (8) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the parties before us and also born by the record that no exempt income was derived by the assessee during the year under consideration. CIT(A) examined the record and found that the assessee has not earned any exempt income warranting the disallowance u/s. 14A r.w. Rule 8D. Admittedly, the circular issued by the CBDT is not binding on the appellate authority as rightly held by the CIT(A) in impugned order at page No. 13 and it is justified - as it is clearly established that the assessee has not earned any exempt income. Therefore, no disallowance is warranted by applying the method prescribed under Rule 8D. Therefore, in our opinion the disallowance made by the AO is not warranted and the CIT(A) rightly deleted the same, therefore, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies through its partner having the share holding more than 10%. According to the AO, the assessee is a beneficiary share holder and the said investments of the shares are reflected in the Balance sheet and show caused the assessee to explain as to why the provisions of section 2(22)(e) of the Act should not be applied. The assessee given explanation which is reproduced in assessment order. The AO held the provisions of section 2(22)(e) of the Act is applicable and an amount of ₹ 1,26,86,901/- were added to the total income of the assessee. The CIT(A) justified the order of AO in holding the provisions of section 2(22)(e) of the Act are attracted. Before us, the ld. AR submitted that the similar issue were raised in earlier years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 2,07,48,694/-, being, the amount of deemed dividend of ₹ 1.18 crore in respect of M/s. Manraj Jewellers Pvt. Ltd. and ₹ 89.01 lakh in respect of M/s. R.L. Gold Pvt. Ltd. The ld. CIT(A) sustained the addition, against which the assessee has come up in appeal before the Tribunal. 7. Having heard both the sides and gone through the relevant material on record, it is observed that similar issue came up for consideration before the Tribunal in assessee s own case for the A.Y. 2010-11. A detailed discussion has been made in the order for such year and eventually the matter has been restored to the file of AO for a fresh a decision. Admittedly, the facts and circumstances of the ground for the instant year are similar t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellate authority as was interpreted by the Hon ble Supreme Court and High Courts deleted the addition made by the AO on account of disallowance u/s. 14A r.w. Rule 8D. The ld. DR relied on the order of AO and prayed to restore the same by allowing the grounds of appeal. 11. We note that the assessee clearly contended before the AO that when there is no exempt income the method prescribed in Rule 8D is not applicable which is evident from the assessment order at para No. 5.2 inspite of which the AO proceeded to made applicable the circular issued by the CBDT by holding it is binding on the assessing authority. The fact remains admitted by both the parties before us and also born by the record that no exempt income was derived by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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