TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 957
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.... (hereinafter "the Act") which was made by the Assessing Officer. 3. Brief facts of the case is that the assessee is a limited company engaged in the business of manufacturing textiles fabrics, etc. The Assessing Officer noted that the assessee has shown dividend income to the extent of Rs. 2,22,343 and claimed it as exempt income in its computation of total income. The Assessing Officer after perusal of the balance-sheet noted that the assessee has shown huge investments amounting to Rs. 30,07,67,119 as on March 31, 2012. Therefore, the assessee was asked to furnish details of disallowable expenditure with regard to earning of exempt income. The assessee vide its submission dated January 28, 2015, submitted that it has not incurred any ex....
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....B/C = 1,41,66,02,934 x 34,65,81,690 / 27,87,35,63,633 = 1,76,14,132 8D(2)(iii) = ½ % (B) [½ % of 34,65,81,690] = Rs. 17,32,908 Total = Rs. 1,93,47,040 Therefore, as per the provisions of rule 8D(2)(ii)/8D(2)(iii) read with section 14A, the disallowance of expenditure attributable to exempt income comes to Rs. 1,93,47,040 and added back to income of the assessee." 4. Aggrieved the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) who was pleased to delete the same by observing as under : "Here in the instant case of the assessee, pre-condition laid down by rule 8D(1) has not been met by the Assessing Officer thereby, the application of formula as laid down in rule 8D(2) is unjustified and t....
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.... not satisfied with the correctness of the claim of the assessee in respect of such expenditure to earn income not includible in total income of the assessee. 7. The assessee's case is that it has not incurred any expenditure to earn income not includible in the total income and so no disallowance under section 14A of the Act is warranted. As per the provision of section 14A of the Act, even if the assessee's claim is that no expenditure has been incurred by him relating to income which does not form part of total income, then as per sub-section (3) of section 14A recourse can be taken by the Assessing Officer of sub-section (2) of section 14A and in this case when the assessee assert that no expenditure had been incurred in relati....
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....earning the income is not an allowable deduction. For the year in question, the finding of fact is that the assessee had not earned any tax-free income. Hence in the absence of any tax-free income, the corresponding expenditure could not be worked out for disallowance. The view of the Commissioner of Income-tax (Appeals) and the Tribunal does not give rise to any substantial question of law. Hence, the deletion of the disallowance of Rs. 2,03,752 made by the Assessing Officer was in order." In the light of the aforesaid decision of the hon'ble jurisdictional High Court reliance placed by the Revenue on the aforesaid co-ordinate Bench decision is of no assistance to them because the order of the co-ordinate Bench is no longer good law a....
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....ed dividend income to the extent of Rs. 2,22,343 and has claimed it as exempt income and informed the Assessing Officer that it has not incurred any expenditure in earning the income which is claimed as exempt income and the hon'ble Delhi High Court in the case of CIT v. Taikisha Engineering India Ltd. dated November 25, 2014, [2015] 370 ITR 338 (Delhi) ; [2015] 275 CTR (Delhi) 316 wherein it was held that "The Assessing Officer at the first instance must examine the disallowance made by the assessee or the claim of the assessee that no expenditure was incurred to earn the exempted income. If and only if the Assessing Officer is not satisfied on this count after making reference to the accounts, that he is entitled to adopt the method a....
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....re, he disallowed a sum of Rs. 41,94,658. Aggrieved the assessee preferred an appeal before the learned Commissioner of Income-tax (Appeals) who was placed to delete the same by the holding as under : "The authorised representative has submitted that once the expenditure has been allowed, the income will not have any effect on the returned income of the assessee. I have also considered the submissions and arguments placed by the authorised representative of the assessee along with contents of the assessment order. The Assessing Officer has treated these amounts (ESI and PF) paid after due dates as income under section 36(1)(va). The authorised representative of the assessee has submitted the details along with copy of challans for payment....