2017 (3) TMI 1563

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....ce made u/s 14A by holding that assesse did not earn any exempt income. 2. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. 3. The appellant craves leave to amend or alter any grounds or add a new ground, which may be necessary." 2. The brief facts of the case are that the assesse is a limited company, engaged in the business of manufacturing/processing of Frozen Marine products, filed its return of income for the assessment year 2012-13 on 22-09-2012 declaring total income of Rs. 20,83,44,600/- under normal provision and Rs. 20,62,01,636/- under the provision of Sec. 115JB of the IT Act. The case was selected for scrutiny and accordingly, ....

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.... in relation to the exempt income as required by the provision of Sec. 14A of the Act, accordingly worked out disallowances u/s 14A r.w.r 8D and made addition of Rs. 44,84,659/- 3. Aggrieved by the assessment order the assesse preferred an appeal before the CIT(A). Before the CIT(A), the assessee reiterated the submissions made before the A.O. The assesse further contended that where there is no exempt income in the form of dividend from the shares, it has been judicially held that the provision 14A r.w.r 8D has no application. The assesse referring to the decision of the Hon'ble Delhi High Court in the case of Cheminvest Ltd., Vs. Commissioner of income Tax [2015] 378 ITR 33(Del), submitted that if there is no exempt income which forms ....

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....perused the material available on record. The A.O invoked Sec. 14A r.w.r 8D and disallowed expenditure incurred in relation to exempt income which does not form part of total income under this Act. According to the A.O, the assesse is liable for disallowance u/s 14A of the IT Act, the moment there is a investment in shares, whether or not earned exempt income in the form of dividend which is received or receivable during the relevant assessment year. The contention of the assesse that Sec. 14A r.w.r 8D has no application, when there is no exempt income which forms part of total income under this Act. We find that Sec. 14A of the IT Act provides for disallowance of expenditure incurred in relation to exempt income, which does not form part o....