2019 (2) TMI 1066

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....R PER AMARJIT SINGH, JM: The assessee has filed the present appeal against the order dated 30.06.2017 passed by the Commissioner of Income Tax (Appeals)-3, Mumbai [hereinafter referred to as the "CIT(A)"] relevant to the A.Y.2014- 15. 2. The assessee has raised the following grounds of appeal:- "1. Learned CIT(A) erred in confirming addition of Rs. 2,51,638/- under section 14A of....

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....es on exempt income is claimed against taxable income." 3. The brief facts of the case are that the assessee filed its return of income on 27.11.2014 declaring total income to the tune of Nil. The assessment was selected for scrutiny under CASS. Notice u/s.143(2) and 142(1) of the Income Tax Act, 1961 ( in short "the Act") were issued and served upon the assessee. The assessee showed the limite....

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....(A). The basic contention of the assessee is that the expenses were not claimed against the exempt income, therefore, section 14A of the Act is not applicable. However, on the other hand the learned representative of the department has strongly relied upon the order passed by the CIT(A) in question. The assessee claimed that it has earned the exempt income under the principle of mutuality. The ass....

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....tive given by way of exemptions to certain categories of income is being used to reduce also the tax payable on the non-exempt income by debiting the expense incurred to earn the exempt income against taxable income. This is against the basic principles of taxation whereby only the net income, i.e., gross income minus the expenditure is taxed. On the same analog, the exemption is also in respect o....