2015 (2) TMI 1097

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.... wrong in disallowing expenses for earning Dividend Income; 2(b) That the Ld. CIT(A) has gone in disallowing expenses for earning Dividend Income by considering those Investment on which no dividend has been received by the assessee company during the year." 3. Briefly stated the facts of the case are as follows. The assessee is a limited company. It is engaged in the business of book publishing and export of software. The return of income was filed on 29.09.2009 declaring total income of Rs. 1,50,37,780/-. The assessment was taken up for scrutiny by issuing of notice u/s 143(2) of the Act and the scrutiny assessment was completed u/s 143(3) of the Act (assessment order dated 13.12.2011). In the scrutiny assessment completed, th....

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....xcluded for the purpose of disallowance u/s 14A r.w.r. 8D(2)(iii) of the Act. It was submitted by the Ld. counsel for the assessee that the following judicial of precedents of the Hon'ble High Court and the Tribunal have held that the investment on which no income was received are to be excluded, while computing disallowance under Rule 8D(2)(iii) of the IT Rules. i) CIT Vs. Holcim India P. Ltd. in ITA No.486/2014 and 299/2014. ii) ACIT Vs. M/s Computer Age Management Services (P) Ltd. in ITA No. 1236 and 1240/Mds/2014. iii) Mitshubishi Corporation Pvt. Ltd. Vs. DCIT in ITA No. 803/Del/2014. iv) LG Chemical India (P) Ltd. in ITA No.331/Del/2013. v) M/s Alliance Infrastructure Projects Pvt. Ltd. Vs....

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..... M/s Lakhani Marketing Incl., ITA No. 970/2008, decided on 02.04.2014, made reference to two earlier decisions of the same Court in CIT Vs. Hero Cycles Limited, [2010] 323 ITR 518 and CIT Vs. Winsome Textile Industries Limited, [2009] 319 ITR 204 to hold that section 14A cannot be invoked when no exempt income was earned. The second decision is of the Gujarat High Court in Commissioner of Income-Tax -I Vs. Corrtech Energy (P.) Ltd. [2014] 223 Taxmann 130 (Guj.). The third decision is of the Allahabad High Court in Income Tax Appeal No. 88 of 2014, Commissioner of Income Tax (ii) Kanpur, Vs. M/s Shivam Motors (P) Ltd. decided on 05.05.2014. In the said decision it has been held: "As regards the second question, Section 14A of the A....

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....ed orders of lower authorities and the decision relied on. On a careful consideration of the facts and circumstances of the case, we are not in agreement with the assessee that no expenditure was incurred in managing the portfolio of the assessee. The assessee company is into the business of registrars and share transfer agent. It is not in dispute that management of the assessee company periodically monitors through its Board of Directors about the investments. In such circumstances, it cannot be said that assessee has not at all incurred any expenses in managing its portfolios. Para 11. The Kolkata Bench of this Tribunal in REI Agro Ltd. Vs. DCIT (supra) held that disallowance under section 14A read with Rule 8D can be made only ....