2019 (4) TMI 1668

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...., 1961 [hereinafter referred to as 'the Act'] r.w.r 8D of the Rules and secondly, the assessee is aggrieved by the disallowance of Rs. 20,96,958/- on account of business loss. 3. Briefly stated, the facts of the case are that return declaring loss of Rs. 1.94 lakhs was e-filed on 16.10.2014. Return was selected for scrutiny under CASS and, accordingly, statutory notices were issued and served upon the assessee. 4. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has made investment in unquoted equity shares in various companies, the income of which is exempt u/s 10(34) of the Act. The Assessing Officer found that the assessee has not made any disallowance u/s 14A of the Act,....

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....vidend income amounting to Rs. 6,46,476/-. Disallowance of write off was confirmed. 11. Before me, the ld. AR drew my attention to the balance sheet of F.Y. 2008-09 and pointed out that all the investments have been made in F.Y. 2008-09 from available own funds and no interest bearing funds were utilised in making the investment in these shares. It is the say of the ld. AR that since no interest bearing funds have been utilised, there is no question of any disallowance u/s 14A of the Act in so far as interest component is concerned. 12. On disallowance of expenditure, in respect of administrative expenses, the ld. AR relied upon the decision of the Mumbai Tribunal in the case of HDFC Bank Ltd 2011-TIOL-691. It is the say of the ld. AR....

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....here the balance at the end of the year shows that the investment is appearing in all the earlier years. Therefore, the disallowance u/s 14A is rightly deleted by the CIT(A)." 16. The Hon'ble Bombay High Court in the case of Reliance Industries Ltd [supra] has held as under: "The assessee has earned dividend income only from three companies. There is no fact of having incurred any expenditure for the purpose of earning the dividend income. The disallowance in our view is misconceived and the same is deleted." 17. In the light of the decision of the Hon'ble Bombay High Court, I find that in the case in hand, the assessee has derived dividend income only from one company and no expenditure has been incurred. Therefore, ....