AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 941
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.... the investment in equity shares. 2. During hearing, the ld. DR, Shri Sushil Kumar Poddar, contended that the assessee is having controlling interest in the company, therefore, in view of the decision from Hon'ble Karnataka High Court in M/s United Breweries Ltd. vs DCIT (ITA No.419 of 2009) order dated 31/05/2016, the order of the Ld. Commissioner of Income Tax (Appeal) deserves to be reversed as the assessee was having controlling interest in the company. On the other hand, the ld. counsel for the assessee, Shri Ajay R. Singh, contended that no exempt income was earned by the assessee and he relied upon by the decision from Hon'ble Delhi High Court in Chem Invest ltd. vs CIT (2015) 378 ITR 33 (Del.) and another decision of the Tr....
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....held that section 14 of the Act or rule 8D cannot be interpreted so as to mean that the entire tax exempt income of the assessee is to be disallowed. That the window for disallowance is indicated in Section 14A and is only to the extent of disallowing expenditure incurred by the assessee in relation to the tax exempt income. This proportion or portion of the tax exempt income surely cannot swallow the entire amount of tax exempt income. Similar view has been taken by the Hon'ble Punjab & Haryana High Court in the case of 'PCIT vs. Empire Package Pvt. Ltd.' in ITA No.415 of 2015 dt.12/1/16 (P&H). 2.3. The Hon'ble Delhi High Court in the case of "M/s Cheminvest Ltd. vs. CIT" (2015) 61 taxman.com 118; 378 ITR 33 (Del.), wherein also the asses....
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....ies in the course of business for its expansion". 2.5. Vide para-8 onwards of the order from Hon'ble Karnataka High Court, it was observed/held as under:- "8. So far as second question of applicability of Sec.14A of the Act to the expenses incurred by the appellant towards interest and others on the loan borrowed is concerned, the finding of the Tribunal is at paragraph 11 which reads as under: 11. The revenue is in appeal and we have considered the rival contentions. IN our view, the recent judgment of the Special Bench in Bombay in ITO v. Daga Capital Management Pvt. Ltd.., ('2009) 312 ITR (AT) 1, is applicable to the facts of the present case. In this order, it has been. held. that section 14A is applicable even where the mo....
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....taken by the Assessing Officer which has been so ordered by the Tribunal. Hence, it can be said that the Tribunal has exercised the discretion where rights of both sides are kept open for admissible deduction under Sec.14A. When such a discretion is exercised and the rights of the appellant -assessee is also kept open to satisfy the Assessing Officer, it cannot be said that any substantial questions of law would arise for consideration, as sought to be canvassed. In our view, at the stage of enquiry under Sec. 14A, it is open to the Assessing Officer to independently consider the matter for admissibility of the interest on borrowings and if yes to what extent. Hence, when the question at large is further to be considered by the Assessing Of....
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....e canvassed. It was further observed that, at the stage of enquiry u/s 14A, the Assessing Officer is free to independently consider the matter for admissibility of interest on borrowings and its extent. In the present appeal, we note that no exempt income was earned by the assessee from the strategic investment made in group companies, therefore, no disallowance was required to be made u/s 14A of the Act. The expression "does not form part of the total income" in section 14A of the Act, envisage that 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 income. In other words, section 14A will not ....