TMI Blog2022 (3) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... ) TMI 1312 - KARNATAKA HIGH COURT] disallowance u/s. 14A should be limited to the exempt income. Accordingly, we hold that where there is no exempt income, no disallowance could be made by the AO and direct the AO to disallow the expenditure to the exempt income only. If there is no exempt income, no disallowance should be made. Addition on account of amount deducted from profit which is the amount written back in the balance sheet out of BWSSB deposit collected from the flat owners and already offered to tax - contention of the Ld. AR is that this amount has been offered to tax in the AY 2012-13 - HELD THAT:- AR drew our attention to the assessment order for AY 2012-13 dated 14.8.2014 and submitted that the unutilized deposits has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, the CIT(Appeals) rightly deleted the same. We do not find any infirmity in his order and the same is confirmed. The revenue's appeal is dismissed. - ITA Nos. 1847 & 1923/Bang/2017 - - - Dated:- 9-3-2022 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER And AND SMT. BEENA PILLAI, JUDICIAL MEMBER For the Appellant : S.N. Shyanbhag, Advocate For the Respondents : Priyadarshini Mishra, Addl. CIT (DR) ORDER Per Chandra Poojari , Accountant Member These are cross appeals by the assessee and the department directed against the order dated 11.7.2017 of the CIT(Appeals)-2, Bengaluru for the assessment year 2014-15. ITA No. 1847/Bang/2017 (Assessee's appeal) 2. The assessee has raised the following grounds:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax at the time of survey for the assessment year 2012-13. As the accounts of the Appellant Company were closed for the Assessment Years 2012-13 and 2013-14 when the income was offered to tax, ₹ 1,09,00,000/- out of 2,53,00,000/- was written back as income for the Asst. Year 2014-15 by including it in Miscellaneous Income, a sufficient disclosure was also made in clause 1(h) of the Notes to Accounts in Balance sheet and same was deducted from the profit as it was already offered to tax as income. 7. The CIT (A) erred in confirming the addition of ₹ 5,79,500/- being claim of the appellant u/s. 80G stating that no material was produced by the appellant at the time of hearing of appeal, when in fact your appellant has file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proportionately. Even this interpretation of Rule is also not upheld by the Hon'ble High Court of Delhi in the case of Pr. CIT, Delhi V/s. Bharati Overseas Pvt. Ltd. (ITA 802/2015) dated 17.12.2015. The Hon'ble Curt held that the department has failed to appreciate the scope of section 14A and Rules made thereunder, which are not applicable to common expenses incurred, to earn both exempted and taxable income. In the present case, A.O. has made addition of common expenses incurred to earn both exempted and taxable income. This is not justifiable and not authorised by law. In view of the stand taken by the department itself in the above case before the Hon'ble High Court, this addition needs to be deleted. Apart from this the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the computation of income. He also drew our attention to the Note 1(h) of the 'Notes forming part of the financial statements for the year ending 31.3.2014' wherein it is reported as follows:- (h) Miscellaneous Receipts Miscellaneous receipts include ₹ 10900000 being the unutilised portion of KEB, BWSSB deposits collected from the course of the scrutiny assessment proceedings for the said year. 7. Further, the Ld. AR drew our attention to the assessment order for AY 2012-13 dated 14.8.2014 and submitted that the unutilized deposits of ₹ 2,35,00,000 has been offered to tax for the AY 2012-13 and amount of ₹ 1.09 crores has been included in this amount and same cannot be treated as income for the cur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corpus funds' at the time of sale of sites and these amounts remained as corpus funds with assessee for regular maintenance of the project till the site owners association is formed. The corpus fund has to be transferred to the Association of site owners when it is formed. Accordingly assessee collected ₹ 1,89,42,000 during the FY 2013-14 relevant to AY 2014-15. The corpus fund was invested in mutual fund and same was not utilized for business of the assessee. The AO treated the same as income u/s. 28 as there was no existing liability to the assessee. 12. The CIT(Appeals) observed that the said receipt is shown as liability and the same amount is received during ay 2013-14 and subsequently. In the absence of any other evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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