2017 (6) TMI 486

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... That the order dated 8.5.2014 passed u/s 250 of the Income Tax Act, 1961 by the Learned Commissioner of Income- Tax (Appeals) 1, New Delhi is against law and facts on the file in as much as he was not justified in partly upholding the action of the Learned Assistant Commissioner of Income Tax, Central Circle-13, New Delhi in restricting the disallowance under section 14-A of the Income Tax Act, 1961 on account of expenditure incurred in relation to exempt income to Rs. 76,46,670/- while computing income under the normal provisions of the Income-tax Act, 1961 by ignoring the factual position and the submissions made on behalf of the Appellant Company." 4. The revenue has filed the appeal on the following grounds :- "1.The order of Ld. CI....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the I.T. Rules. 6. The assessee challenged the addition before Ld. CIT(A) and made detailed submissions and also submitted that assessee did not make any claim of exemption, therefore no disallowance can be made. The assessee also demonstrated that the substantial expenditure was relatable to its manufacturing / business activities i.e activities distinct from passive activity of investment in shares. Ld. CIT(A) following the decision of the Delhi High Court in the case of Maxopp Investment Ltd. vs. CIT 347 ITR 272 (Delhi) substantially accepted the explanation of assessee because the interest expenditure of the assessee was entirely attributable to the funds raised from the financial institutions for setting up the 150 MW power plant in ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....,063/- as exempt income from its investments. The assessee has added the same in computation of income and later on reduced the same u/s 10 of the I.T. Act. Therefore assessee has disallowed entire amount of Rs. 1,75,063/- u/s 14A r.w.r. 8D of the I.T. Act. Hon'ble Delhi High Court in the case of Joint Investments Pvt. Ltd. vs. CIT (supra) in para 9 and 10 held as under :- "9. In the present case, the AO has not firstly disclosed why the appellant/assessee's claim for attributing Rs. 2,97,440/- as a disallowance under Section 14A had to be rejected. Taikisha says that the jurisdiction to proceed further and determine amounts is derived after examination of the accounts and rejection if any of the assessee's claim or explanation....