TMI Blog2021 (3) TMI 1422X X X X Extracts X X X X X X X X Extracts X X X X ..... 49 OF 2019 - - - Dated:- 10-3-2021 - THE HON'BLE MR. JUSTICE SATISH CHANDRA SHARMA AND THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ For the Appellant : SRI. E.I. SANMATHI, ADVOCATE-PH For the Respondent : SRI. N. NARENDRA SHARMA, ADVOCATE-PH JUDGMENT 1. The present Income-tax appeal is arising out of the order dated 31.08.2018 passed by the Income-tax Appellate Tribunal. 2. The facts of the case reveal that the assessee is a company engaged in the business of development and construction of houses, buildings and other related activities. The assessee has filed its return of income for the Assessment Year 2014-15. During the assessment proceedings, the Assessing Officer made disallowance under Section 14A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue. The subject matter of the appeal pertains to the Assessment Year 2009-10. The appeal was admitted by a Bench of this Court vide order dated 05.04.2016 on the following substantial question of law: Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in deleting the disallowances made under Section 14A read with Rule 8D(2)(ii) and 8(D)(2)(iii) of the Act without appreciating the contents of Circular No. 5/2014 dated 11.02.2014, which emphasized that only expenditure allowable is relatable to earning of income and therefore, the expenses which are relatable to earning of exempt income have to be considered for disallowance, irrespective of the fact whether such income has been earned during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 4,92,78,160/- and sustained the disallowance made by the Assessing Officer under Rule 8D(2)(iii) to the extent of Rs. 18,71,270/- as against the original disallowance under Rule 8D(2)(iii) of Rs. 27,91,520/-. However, disallowance of Rs. 3,81,18,472/- was sustained. 3. The revenue filed an appeal against the order passed by the Commissioner of Income Tax (Appeals) before the Income Tax Appellate Tribunal (hereinafter referred to as 'the tribunal' for short) namely ITA No. 168/Bang/2013, whereas the assessee filed cross-appeal before the Tribunal against the order of the Commissioner of Income Tax (Appeals) to the extent it was passed against it in ITA No. 1417/Bang/2012. The Tribunal, vide its common order dated 23.06.2015, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome which is exempt from tax and therefore, the provisions of Section 14A of the Act are not applicable to the fact situation of the case. The aforesaid aspect of the matter was even disputed by the revenue before the Tribunal. Therefore, on admitted facts, the Tribunal has set aside the disallowance of the claim under Section 14A of the Act. 6. We have considered the submissions made on both sides and have perused the record. From perusal of paragraph 6 of the communication dated 15.11.2011, it is evident that the assessee had taken a specific stand before the Assessing Officer in the assessment proceedings itself that the assessee has not earned any income which is exempted from tax. The relevant extract of paragraph 19 of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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