TaxTMI 
TaxTMI 
2017 (3) TMI 1319
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....14A of I.T. Act holding that the assessee has not earned any exempt income during the relevant Assessment Year. 3. A similar issue for the A.Y. 2011-12 is pending before the Hon'ble ITAT and the same has not reached finality." 2. Briefly the facts of the case are that the assessee, an HUF, derived income from trading in shares and had filed its return of income delcaring a total income of Rs. 50,68,154/-. The assessee had claimed a deduction of interest of Rs. 1,20,04,439/- paid towards loans taken, against income under the head 'income from other sources'. According to the assessee, the loan was borrowed and invested as share application money in the company, M/s. Autofin Ltd., Secunderabad, in which he was the Managing Dir....
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....tion money, the income from which did not form part of total income, the claim of deduction of interest expenditure was not allowable u/s. 14A of the Act. He, accordingly, disallowed the entire interest expenditure of Rs. 1,20,04,439/- claimed as expenditure as the borrowed money was invested in share application money and the entire interest had been claimed as deduction. 3. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A) and submitted that the funds had been borrowed purely on account of commercial expediency as the company had incurred huge losses and its total accumulated losses as on 31/03/2012 had become Rs. 13.94 crore, as a result of which its entire net worth was wiped out. In such a situation of c....
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....d or receivable during the relevant assessment year. In view of the same, assessee's appeal on this ground is allowed." 6.1 In the case of Madhucon Infra Ltd. (ITA No. 410/Hyd/2015, order dated 20/05/2016 - where both the Members are signatories), the coordinate bench has held as under: "10. Considered the submissions of both the parties and perused the material facts on record as well as the orders of revenue authorities. We have also gone through the cases cited by the ld. AR. In the case of M/s Alliance Infrastructure Projects Pvt. Ltd., (supra), the coordinate bench of ITAT Bangalore has held as under: "14. Therefore, unless and until, there is receipt of exempted income for the concerned assessment years, we are of the view, Secti....
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....rder of ld. CIT(A) on this issue." 10.3 In the case of CIT Vs. Corrtech Energy (P) Ltd., (supra), the Hon'ble Gujarat High Court has held as under: "4. Counsel for the Revenue submitted that the Assessing Officer as well as CIT (Appeals) had applied formula of rule 8D of the Income Tax Rules, since this case arose after the assessment year 2009-2010. Since in the present case, we are concerned with the assessment year 2009-2010, such formula was correctly applied by the Revenue. We however, notice that sub-section(1) of section 14A provides that for the purpose of computing total income under chapter IV of the Act, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form....