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TMI Blog2018 (11) TMI 1899X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer towards purchase of movies, programme production expenses, amortization of film and Broadcast rights, consumables and Media expenses at Rs..400,28,71,930/-. 2.1 We have heard the submissions of Shri S. Bharath, CIT, ld. Departmental Representative and Shri N. Devanathan ld. Authorised Representative of assessee and gone through the orders 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue arises for consideration is disallowance made by the ld. Assessing Officer under section 14A read with Rule 8D towards expenditure relating to the exempt income and investments. After considering the submissions of the assessee, the Assessing Officer determined the disallowance of Rs..67,37,913/- under Rule 8D(2)(ii) and Rs..2,36,34,417/- under Rule 8D(2)(iii) totalling to Rs..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( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed has no causal connection with the exempted income, then such an expenditure would obviously be treated as not related to the income that is exempted from tax, and such expenditure would be allowed as business expenditure. To put it differently, such expenditure would then be considered as incurred in respect of other income 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is attributable to the dividend income has to be disallowed and cannot be treated as business expenditure. Keeping this objective behind Section14A of the Act in mind, the said provision has to be interpreted, particularly, the word 'in relation to the income' that does not form part of total income. Considered in this hue, 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 do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany, may be for the purpose of having controlling interest therein. On that reasoning, appeals of Maxopp Investment Limited as well as similar cases where shares were purchased by the assessees to have controlling interest in the investee companies have to fail and are, therefore, dismissed. 4.2 From the above judgement of the Hon'ble Supreme Court, it is amply clear that any investments made in the subsidiary, which is not for the purpose of earning dividend and may be for the purpose of having controlling interest therein, shall attract the provisions of section 14A read with Rule 8D. Accordingly, we set aside the order of the ld. CIT(A) on this issue and sustain the disallowance made under section 14A r.w. Rule 8D(2)(iii). 5. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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