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TMI Blog2023 (10) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... this case is whether any disallowance under section 14A of the Income Tax Act, 1961 (for short "the Act") read with rule 8D of the Income Tax Rules, 1962 (for short "the Rules") could be made if the assessee had not earned any exempt income during the year under consideration. 3. Brief facts of the case are that during the year under consideration, the assessee company is mainly engaged to carry on the business as a Non-Banking Finance Company (NBFC), providing loans, Inter-Corporate Deposits (ICD) and making investments primarily within group companies to meet their business requirements and the company's income comprised mainly interest income. Assessee also made investments in subsidiary companies for furthering its business connection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment Ltd vs. CIT (2018) 91 taxmann.com 154, when the assessee knows it well that the investment which it make in the group companies would yield dividend, the assessee would necessarily earn such dividend and therefore, it is not the quirk of weight that the assessee received the dividend declared by the investee company, during the period in which the assessee holds such shares. 7. The learned DR placed reliance on the decisions in Maxopp Investment Ltd (Supra) and the decision of the Hon'ble Karnataka High Court in the case of CIT vs. Kingfisher Finvest India Ltd (2020) 121 taxmann.com 232 (Kar.) in support of his contention that the deletion of addition cannot be sustained. 8. Per contra, learned AR submitted that the view taken by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thereby to earn profit, but the assessee holds such shares in the group companies to meet the business requirements of such companies. Assessee is bound to receive the dividend when it is declared. Therefore, the decision of the Hon'ble Supreme Court in the case of Maxopp Investment Ltd (Supra) as followed by the Hon'ble Karnataka High Court in the case of Kingfisher Finvest India Ltd (Supra) is applicable to the facts of the case. 11. Argument of the learned Counsel that the issue is held in favour of the assessee in assessee's own case for earlier assessment years does not hold much water. A careful reading of order cited makes it clear that for the earlier assessment years, this fact of assessee investing in group companies for the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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