TMI Blog2018 (11) TMI 1899X X X X Extracts X X X X X X X X Extracts X X X X ..... is aired. The ld. CIT(A), in fact, followed the order of Tribunal in assessee's own case for assessment years 2004-05 to 2009-10 - Therefore, this Tribunal do not find any reason to interfere with the order of ld. CIT(A). Accordingly, the order of ld. CIT(A) is confirmed in the departmental appeal. Disallowance u/s 14A r.w.r. 8D - expenditure relating to the exempt income and investments - HELD THAT:- We have considered the submissions of the ld. Counsel that the dominant intention in making investments in the subsidiary company is not to earn the dividend income, but, to control the business of the subsidiary company and therefore, the said investments should be excluded for the purpose of computation of disallowance under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of authorities below. It is brought to notice of the Bench that an identical issue came before this Tribunal for assessment year 2012-13 in assessee's own case filed by the Revenue in I.T.A. No.1309/Mds/2017 dated 14.08.2017. This Tribunal after considering the earlier decision in assessee's own case in I.T.A. Nos.1515 to 1520/Mds/2013 for assessment years 2004-05 to 2009- 10 vide order dated 31.10.2013 and in I.T.A. Nos.1340 1341/Mds/2015 dated 19.02.2016 found that the similar expenditure incurred by the assessee has to be allowed as a revenue expenditure. The ld. CIT(A), in fact, allowed the claim of assessee by placing reliance on the order of Tribunal for the earlier assessment years 2004-05 to 2009-10 vide order dated 31.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34,417/- under Rule 8D(2)(iii) totalling to ₹.3,03,72,330/-. After considering the submissions of the assessee that the investments in subsidiary company should be excluded for the puirpose of computation of disallowance under section 14A r.w. Rule 8D by relying on the decision of the Tribunal in the case of DCIT v. EIH Associated Hotels Ltd. in I.T.A. Nos. 1919 1920/Mds/2015 dated 01.07.2016, the ld. CIT(A) directed the Assessing Officer to restrict the disallowance of ₹.2,36,34,417/- made under Rule 8D(2)(iii). 4.1 We have heard the rival contentions, perused the materials available on record and gone through the orders of authorities below. We have considered the submissions of the ld. Counsel that the dominant intention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome which is to be treated as part of the total income. 33) There is no quarrel in assigning this meaning to section 14A of the Act. In fact, all the High Courts, whether it is the Delhi High Court on the one hand or the Punjab and Haryana High Court on the other hand, have agreed in providing this interpretation to section 14A of the Act. The entire dispute is as to what interpretation is to be given to the words in relation to in the given scenario, viz. where the dividend income on the shares is earned, though the dominant purpose for subscribing in those shares of the investee company was not to earn dividend. We have two scenarios in these sets of appeals. In one group of cases the main purpose for investing in shares was to gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the principle of apportionment of expenses comes into play as that is the principle which is engrained in Section 14A of the Act. This is so held in Walfort Share and Stock Brokers P Ltd., relevant passage whereof is already reproduced above, for the sake of continuity of discussion, we would like to quote the following few lines therefrom. http://www.itatonline.org 35 The next phrase is, in relation to income which does not form part of total income under the Act . It means that if an income does not form part of total income, then the related expenditure is outside the ambit of the applicability of section 14A.. xxx xxx xxx The theory of apportionment of expenditure between taxable and non-taxable has, in principle, been now widened ..... X X X X Extracts X X X X X X X X Extracts X X X X
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