2018 (11) TMI 1167

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.... of manufacturing/process of marine products. It filed its return of income for the AY 2013-14 on 21/09/2013 declaring total income at Rs. 18,09,92,500/- and book profit u/s 115JB at Rs. 19,36,26,011/-, which was processed u/s 143(3) of the I.T. Act. Subsequently, the case was selected for scrutiny and accordingly, notices u/s 143(2) and 142(1) of the Act were issued to the assessee. Assessment u/s 143(3) was completed by making disallowance of Rs. 58,92,004/- u/s 14A of the Act. 3. When the assessee preferred an appeal before the CIT(A), the CIT(A) observed that as per the statement of facts and details like P&L Account furnished by the AR of the assessee were verified and found that there is no dividend income. He further observed that....

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....ts. During the course of assessment proceedings, the AO asked the assessee company to furnish the details of expenditure incurred in relation to the above investments and show cause as to why the provisions of section 14A r.w. Rule 8D may not be invoked. In response, the assessee company stated that section 14A of the Income Tax Act, 1961 is not applicable in their case as it had not invested said amount from any borrowed funds. 5.1 After considering the submissions of the assessee, the AO observed that as per the provisions of section 14A, expenditure incurred in relation to income which does not form part of total income shall be disallowed. Further, the provisions of the section also apply to a case where an assessee claims that no ex....

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....ere is difficulty in finding the expenditure relating to exempt income. The provisions of section 14A and Rule 8D will not apply to the present case. 6.1 In the case under consideration, after going through the financial statements filed by the assessee, we find that there is no dividend income received by the assessee. Therefore, we uphold the order of CIT(A) and dismiss the grounds raised by the revenue. 7. The assessee also filed C.O, wherein the following objections were raised: "1. Learned CIT(A) ought to have considered the other grounds of appeal also while passing the appellate order. 2.(a) The learned AD is not justified in invoking the provisions of Sec 14A of the IT Act and disallowing there by interest ex....