TaxTMI 
TaxTMI 
2016 (4) TMI 1040
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.... and disposed of by this common order for the sake of brevity. 2. The grounds raised in Assessee's Appeal No. 5399/Del/2012 (AY 2009-10) read as under:- "1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the disallowance of Rs. 65,58,705/- out of total disallowance of Rs. 1,80,80,533/- u/s. 14A of the Income Tax Act, 1961 read with Rule 8D of the Income Tax Rules, 1962. 2. That the Ld. CIT(A) erred in not appreciating the fact that the appellant did not earn any exempt income during the year and accordingly did not incur any expenditure attributable to the earning of exempt income. 3. Without prejudice to above, the Ld. CIT(A) ought to have excluded those expenses which are not dire....
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....tended the proceedings and filed necessary details. 4.1 The assessee company is engaged in the business of financing and investment activities. During the year under consideration, gross receipts are declared at Rs. 1.79 Crores against the preceding years receipts of Rs. 2.21 Crores. The assessee company has debited a sum of Rs. 1,13,26,240/- as interest paid. It has also invested a sum of Rs. 163.58 Crores in quoted and unquoted investments. However, as per Profit and Loss Account no dividend income has been shown on such investments. The assessee was asked to explain as to why the provisions of section 14A read with Rule 8D be not invoked as the assessee has claimed interest expenses which is attributable to earning of exempted income.....
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....ture of Rs. 1,82,80,533/- u/s. 14A of the I.T. Act read with Rule 8D of the I.T. Rules and computed the total income of the assessee at Rs. 1,82,87,403/- and completed the assessment u/s. 143(3) of the I.T. Act, 1961 on 16.11.2011. 5. Against the assessment order dated 16.11.2011 the Assessee filed the Appeal before the Ld. CIT(A) who vide impugned order dated 21.8.2012 partly allowed the appeal of the Assessee and restricted the disallowance to the amount of Rs. 65,58,705/- and allowed the relief to the assessee of Rs. 1,29,46,714/- and passed the impugned order dated 21.8.2012. Aggrieved with the impugned order dated 21.8.2012 both the Assessee and Revenue are in cross appeals before the Tribunal. 6. At the time of hearing, Sh. RM M....
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....at there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year." 8.1 Keeping in view of the facts and circumstances of the case and in view of the Order dated 02.09.2015 passed by the Hon'ble Delhi High Court in the case of Cheminvest Limited vs. Commissioner of Income Tax-VI (Supra), we are of the considered opinion that the AO has wrongly disallowed the total expenditure by applying the provisions of Section 14A read with Rule 8D of the I.T. Act and similarly, Ld. C....