TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 298
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....e provisions of Section 14 A of the Act, read with, Rule 8 D of the Income Tax Rules, 1962 (in short, the Rules) was valid. 3.To be noted, the Assessing Officer vide order dated 10.03.2014, had added the aforementioned amount, by disallowing expenditure under Section 14 A of the Act. 3.1.The Assessee had carried the matter in appeal, to the Commissioner of Income Tax (Appeals) [in short, CITA]. 3.2.The CIT(A) vide order dated 09.12.2015, reversed the determination made by the Assessing Officer, in respect of this issue. 3.3.The Tribunal, via, the impugned judgment, allowed the Revenue's Appeal for statistical purposes and remanded the matter to the Assessing Officer, to verify, whether the investment made by the Assessee had been ma....
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....f the aforementioned Circular of the Board and Rule 8D read with Section 14 A of the Act, the expenditure incurred by the Assessee had to be disallowed, even when, admittedly, it had not earned income exempt from tax, in the concerned previous year. 5.1.As indicated above, the CIT(A) disagreed with the Assessing Officer and, consequently, reversed the order dated 10.03.2014. Notably in reaching his conclusion the Assessing Officer relied upon the judgment in the matter of: Cheminvest Ltd., Vs. CIT, 121 ITD 318 (Tribunal - Delhi Bench). 6.The Revenue, being aggrieved, approached the Tribunal. The record shows that during the course of arguments before the Tribunal, the Assessee advanced a submission, to the effect, that in cases, where, in....
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....Officer by relying upon Section 14 A of the Act, was completely contrary to the provisions of the said Section. 10.2.Mr.Senthil Kumar, who appears for the Revenue, submitted that the Revenue could disallow the expenditure even in such a circumstance by taking recourse to Rule 8D. 10.3.According to us, Rule 8D, only provides for a method to determine the amount of expenditure incurred in relation to income, which does not form part of the total income of the Assessee. 10.4.Rule 8 D, in our view, cannot go beyond what is provided in Section 14 A of the Act. 11.Furthermore, we may note that a similar argument was sought to be advanced by the Revenue in the matter concerning, M/s.Redington (India) Limited Vs. The Additional Commissioner of ....
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....sion Bench is contained in the following part of the judgment: "4.The admitted position is that no exempt income has been earned by the assessee in the financial year relevant to the assessment year in issue. The order of assessment records a finding of fact to that effect. The issue to be decided thus lies within the short compass of whether a disallowance in terms of s.14A of the Act read with Rule 8D of the Rules can be contemplated even in a situation where no exempt income has admittedly been earned by the assessee in the relevant financial year. 7.Per contra, Sri.T.Ravikumar appearing on behalf of the revenue drew our attention to the marginal notes of s.14 A pointing out that the provision would apply not only where exempted inco....
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....able in respect of expenditure incurred in relation to the earning of income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income Tax vs. Walfort Share and Stock Brokers (P) Ltd (2010) 326 ITR 1 '.... The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses incurred in relation to exempt income against taxable income and at the same time avail of the tax incentive by way of an exemption of exempt income without making any apportionment of expenses incurred in relation to exempt income.' 10.The provision this is clearly relatable to the earning of actual income and not notional or anticipated income. The submission of the Department to th....