TMI Blog2018 (5) TMI 2107X X X X Extracts X X X X X X X X Extracts X X X X ..... -2018 - SH.R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER For the Appellant : Shri V. K. Gupta, Advocate For th eRespondent : Smt. Vijay Kumar Jiwani, Sr. DR ORDER PER R.K. PANDA, AM: ITA No.5977/Del/2015 filed by the assessee and 6477/Del/2015 filed by the revenue are cross appeals and are directed against the order dated 16.09.2015 of the CIT (A)-III, New Delhi relating to A. Y. 2011-12 ITA No. 6477/Del/2015 filed by the revenue is directed against the order dated 10.09.2015 of the CIT (A)-3, New Delhi relating to AY 2012-13. For the sake of convenience all these appeals were heard together and are being disposed of by this common order. ITA No. 5977/Del/2015 (Assessee) ASSESSMENT YEAR 2011-12 2. Ground of appeal No. 1 by the assessee reads as under. That the CIT(A) erred in disallowing alternate claim made by the appellant on actual payment basis in respect of obtaining approval/ permission expenses incurred in relation to real estate project without appreciating that claim had been made by the appellant for the reason that department has not accepted allowability of expenses on accrual basis and appeals in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng as under :- 14.Ground no. 1 of the Department s appeal relates to notional disallowance made by the AO in respect of loan given to DCM Employees Welfare Trust. Similar disallowance had been made by the AO in earlier years and was subsequently deleted by CIT (A) and ITAT. Accordingly, this ground is covered in favour of the assessee. We find that ITAT in assessee s own case for AY 2006-07 in IT A No. 314/Del/2010 had adjudicated the matter as under: 2.2 In regard to notional interest, the finding of the Tribunal has been as under: In regard to the issue of disallowance of interest on the loans outstanding from Ms/ DCM Employees Welfare Trust, it is noticed that the issue is squarely covered by the decision of the Coordinate Bench of this Tribunal in the assessee s own case for the AY 2003-04 referred to supra and consequently respectfully following the decision of the Coordinate Bench of this Tribunal in the assessee s own case for the AY 2003-04, the findings of the Ld. CIT (A) on this issue stand upheld. Accordingly, this ground of the Department s appeal is dismissed. 6. Respectively following the order of the Tribunal in assessee s own case for the preceding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord. It is observed that the total exempt income earned by the assessee is to the tune of ₹ 25.38 lac, against which an addition of ₹ 1.05 crore has been made. The Hon'ble Delhi High Court in Joint Investment Pvt.Ltd. vs. CIT, vide its judgement dated 25.2.2015, has held that the disallowance u/s 14A cannot exceed the amount of exempt income. The Hon'ble Delhi High Court in the case of CIT vs. Holcim India Pvt.Ltd. (20.143) 90 CCH 081-DEL-HC, has held that there can be no disallowance u/s 14A in the absence of any exempt \ income. The rationale behind these judgements is that the amount of \ disallowance u/s 14A should not exceed the exempt income. Since the total \ exempt income in the instant case is ₹ 25,38,020/-, we direct that the disallowance u/s 14A be restricted to ₹ 18,01,968/- (₹ 25,38,020- ₹ 7,36,052). The remaining amount of disallowance is directed to be deleted. In view of the above it is held that the appellant has received dividend income of ₹ 1,70,000/- during the year under consideration and suomoto made the disallowance of ₹ 2.5 lacs which is more than the income exempt from tax. The disallowance is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blished any nexus between the investment made and the expenditure incurred under interest expenditure and administrative expenses before disregarding the suo moto disallowance made by the assessee vis-a-vis the dividend income of ₹ 70,088/-. The Hon ble Delhi High Court in the case of Joint Investment P. Ltd. vs. CIT (supra) has held that disallowance u/s 14A cannot exceed the amount of exempt income. The Hon ble Delhi High Court in the case of Holcim India P. Ltd. (supra) held that in absence of any exempt income, there can be no disallowance u/s 14A. We also find that the ITAT in assessee s own case for AY 2009-10, on identical set of facts, had restricted the disallowance to the extent of dividend income received during the year. Respectfully following the same, we set aside the order of the Ld. CIT(A) on this issue and direct the AO to restrict the disallowance u/s 14A to ₹ 70,088/-. In the result, the additional ground of the assessee is allowed and ground no. 2 of the Department is dismissed. Ground no. 2 of the assessee s appeal needs no further adjudication. 11. Since, in the instant case also the assessee itself has disallowed an amount of ₹ 2.50 as ag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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