2016 (2) TMI 1213

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s of even date, 10.02.2012 passed by CIT(A)-41, Mumbai for the quantum of assessment passed under section 143(3) for the assessment year 2008-09. Since the issue involved in all the aforesaid appeals are common arising out of identical facts i.e. disallowance made under section 14A r.w. Rule 8D, therefore, they are being disposed off together. 2. In the case of M/s Krishna technology Ltd., the AO has worked out the disallowance of Rs. 74,44,794/- out of interest expenditure and Rs. 8,52,630/- on account of indirect expenditure after taking 0.5% of the average investment. In the case of Krishna Lifestyle Technologies Ltd, the AO has disallowed Rs. 1,37,22,383/- out of interest expenditure and Rs. 1,70,14,940/- being 0.5% on the average inve....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion 14A can be made. 5. After considering the rival submissions and on perusal of the impugned orders, we find it is not in dispute that assessee has not earned any dividend income or any kind of exempt income from the investments made. The Hon'ble Delhi High Court in the case of Cheminvest Ltd (supra) after discussing the entire law on this point including the decision of Hon'ble Supreme Court in the case of CIT vs Rajendra Prasad Moody, reported in [1978] 115 ITR 519 has held as under:- "The plain and natural construction of the language of Sec. 57(iii) of the Income Tax Act 1961 irresistibly leads to the conclusion that to bring a case within the section, it is not necessary that any income should in fact have been earned as a result ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sue in Maxopp Investment Ltd. (supra) was whether the expenditure (including interest on borrowed funds) in respect of investment in shares of operating companies for acquiring and retaining a controlling interest therein was disallowable under Section 14 A of the Act. In the said case admittedly there was dividend earned on such investment. In other words, it was not a case, as the present, where no exempt income was earned in the year in question. Consequently, the said decision was not relevant and did not apply in the context of the issue projected in the present case". Thus, respectfully following the ratio laid down by the Hon'ble Delhi High Court in the case of Cheminvest Ltd (supra), we hold that, no disallowance u/s 14A is called ....