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TMI Blog2021 (11) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... ng grounds have been raised by the assessee: "1(a) That on the facts and in the circumstances of the case the regular assessment order dated 27-12-2016 had been passed by the Ld. AO after making all such enquiries as were warranted in the case and observations to the contrary and the Ld. Pr. CIT was not justified in assuming jurisdiction under section 263 of the Act. 1(b) That on the facts and in the circumstances of the case the regular assessment order dated 27.12.2016 as had been passed by the Ld. AO fully in accordance with the provisions of the law and the order is neither erroneous not prejudicial to the interest of the revenue hence the same could not have been interfered with by the Ld. Pr. CIT in his supervisory jurisdiction un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, on the returned income of Rs. 31,57,623/-. 2. It is established that the assessee company invested Rs. 21,08,65,690/- in shares, which could result into yielding exempt income. In view of Circular No. 5/2014 of CBDT, the expenses related to the exempt income had to be calculated as per Section 14A read with Rule 8D, it is not material that: the assessee should have earned such exempt income during the financial year under consideration. The AO did not raise this issue pertaining to Section 14A of the Act, and did not disallow any expenses to earn exempt income. 3. A show cause notice dated 10.10.2017 was issued and served upon the assessee through Speed Post No. ED 787460642IN and the assessee was asked to file any objection on 23.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." Keeping in view of the above discussions, the objections of assessee is held not tenable and, therefore, rejected. 6. The assessment order passed by the Assessing Officer is field to be erroneous and prejudicial to the interest of revenue and, accordingly, the assessment order is hereby cancelled to the extent of disallowance of expenses related to exempt income. The A.O. is directed to decide the issue afresh and pass speaking order as per law after giving proper opportunity of being heard to the assessee." Sd/- (Himal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in the relevant year. 10. Reference is also invited to the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT vs. M/s. Lakhani Marketing Inc., CIT Vs. Hero Cycles Limited, (323 ITR 518), CIT Vs. Winsome Textile Industries Ltd. (319 ITR 204), decision of Hon'ble Gujarat High Court in the case of CIT vs. Corrtech Energy (P.) Ltd. (223 Taxmann 130) and the decision of Hon'ble Allahabad High Court in CIT vs. Shivam Motors (P) Ltd. wherein it was held that Section 14A cannot be invoked when no exempt income was earned. 11. In the instant case, the ld. PCIT has not disputed the fact that the assessee has not earned any exempt income. Hence, in view of the judicial pronouncement, we hereby hold that the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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