TMI Blog2019 (2) TMI 1977X X X X Extracts X X X X X X X X Extracts X X X X ..... axopp Investment [ 2018 (3) TMI 805 - SUPREME COURT] it was held that dominant purpose for which investment into shares is made by assessee may not be relevant as section 14A applies irrespective of whether shares are held to gain control or as stock-in-trade. Hence, in our considered opinion, this judgment is not relevant to decide this aspect that whether disallowance u/s 14A is to be made in a year in which there is no exempt income. Since, the judgment of Hon ble Delhi High Court and other High Courts are in favour of the assessee on this aspect that no disallowance u/s 14A is to be made in a year in which there is no exempt income, any adverse order of Tribunal cannot be followed by ignoring the judgment of High Court. Respectfully following the decision of Hon ble Delhi High Court rendered in the case of Cheminvest Pvt. Ltd. [ 2015 (9) TMI 238 - DELHI HIGH COURT] we decide this issue in favour of the assessee and delete the disallowance made u/s. 14A. - Decided in favour of assessee. - ITA Nos. 2145, 2146 & 2148/Bang/2016 Assessment Years : 2010-11, 2011-12 &2013-14 - - - Dated:- 8-2-2019 - SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL ME ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ND II: Ground II :Disallowance u/s 14A 1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in upholding the disallowance of ₹ 11,88,25,672/- u/s.14A as expenses incurred for earning exempt income of ₹ 26,52,083/-. 2. On the facts and circumstance of the case and in law, the learned CIT(A) failed to appreciate and ought to have held that the Appellant had in the course of assessment proceedings by way of revised computation of income has claimed that disallowance U/s 14A of the Act should be restricted to dividend income of ₹ 26,52,083/- earned by the Appellant. 3. On the facts and circumstance of the case and in law, the Appellant prays that AO be directed to restrict the disallowance U/s 14A of ₹ 26,52,083/-being to the amount of exempt income earned during the year. Ground II: The Appellant craves leave to add, alter and/or amend all or any of the foregoing grounds of appeal. 3. In this year, the assessee has also raised some additional grounds. But at the time of hearing, it was submitted by ld. AR of assessee that additional grounds are not pressed and hence, these additional grounds are rejected as n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd all or any of the foregoing grounds of appeal. 7. Now we take up the appeal of the assessee for Assessment Years 2010-11 and 2011-12 together because this was the submission of ld. AR of assessee that the facts in dispute in these two years are identical. In respect of ground no. 1 regarding disallowance of contract expenses amounting to ₹ 255 Lakhs, it was submitted by ld. AR of assessee that this ground is not pressed and accordingly this ground is rejected as not pressed. 8. The remaining issue in these two years is regarding disallowance u/s. 14A of the IT Act. Regarding this issue, it was submitted by ld. AR of assessee that disallowance u/s. 14A is to be restricted by considering only those investment on which dividend income was earned by the assessee in the relevant year. In this regard, reliance has been placed on the Tribunal order of the Special Bench of the Delhi Bench of the Tribunal rendered in the case of ACIT Vs. Vireet Investment (P.) Ltd. as reported in [2017] 165 ITD 27 (Delhi-Trib.). He submitted that similar direction should be given to the AO. As against this, the ld. DR of revenue supported the orders of authorities below. It was submitted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 1955, the Central Board of Revenue (now called as Central Board of Direct Taxes) had issued a circular wherein guidance was given to the AOs that they should assess taxable income and compute the tax liability of the taxpayers in accordance with law only and they should not take undue advantage of ignorance of the assessee. In case, any deduction is omitted to be claimed by an assessee and if same is allowable to the assessee as per law, then the AO should, in all fairness, give an opportunity to the assessee to claim it in accordance with law. Further, on this issue, our attention has rightly been drawn upon the judgment of Hon'ble Supreme Court in the case of Kedarnath Jute Mfg. Co Ltd. (supra) wherein it was observed by Hon'ble Supreme Court that whether the assessee is entitled to a particular deduction or not will depend on the provision of law relating thereto and not on the view, which the assessee may take and nor can the existence or absence of entries in the books of account be decisive or conclusive in the matter. Similarly, in the case of India Discount Co Ltd. (supra), it was inter-alia observed by Hon'ble Supreme Court that it is well established that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support of his contention, he placed reliance on the judgement of Hon ble Delhi High Court rendered in the case of Cheminvest Pvt. Ltd. Vs. CIT as reported in (2015) 378 ITR 33. Regarding this aspect that there is no exempt income in this year, he drawn our attention to page no. 81 of the paper book. It was submitted that audited accounts of the assessee for Assessment Year 2013-14 is available on page nos. 69 to 95 of paper book. It was pointed out that as per P L Account on page no. 81 of paper book, there is revenue from operations and other income. He submitted that the schedule no. 18 in respect of other income is available on page no. 90 of the paper book which says that in the present year, there is no exempt income in this year. In this regard, the ld. DR of revenue placed reliance on the Tribunal order rendered in the case of Lally Motors India (P) Ltd. Vs. Pr. CIT as reported in [2018] 93 taxmann.com 39 (Amritsar-Trib.) and on the judgement of Hon ble Apex Court rendered in the case of Maxopp Investment Vs. CIT as reported in [2018] 402 ITR 640 (SC). 15. We have considered the rival submissions. First we deal with the applicability of the two judgements cited by ld. DR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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