2016 (1) TMI 1250

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....d investments amounting to Rs. 908.29 lacs on which the income if earned will be free from taxation. The assessee replied that it had sufficient interest free funds for making such an investment and the interest debited in Profit & Loss Account had been used directly for running the business, income from which is included in the total income. Rejecting the contention of the assessee, the Assessing Officer invoked the provisions of Rule 8D and made disallowance of an amount of Rs. 25,99,000/- under section 14A of the Act. 3. Before the learned CIT (Appeals), the assessee reiterated the submission made before the Assessing Officer. In addition, it was stated that during the year, no dividend has been declared by the company in which these ....

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....Ltd. (2010) 323 ITR 518. 5. The learned D.R. relied on the orders of the lower authorities, particularly last para of the learned CIT (Appeals) order. 6. We have heard the learned representatives of both the parties, perused the findings of the authorities below and considered the material available on record. The claim of the assessee is that it has not earned any tax free income during the year. In the event of no tax free income, disallowance of expenses attributable to any such income anticipated to arise in future cannot be made. For this, we are guided by the judgment of Hon'ble Jurisdictional Punjab & Haryana High Court in the case of Lakhani Marketing Incl (supra), whereby it has been held that in case there is no exempt i....