2020 (8) TMI 269

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....Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance u/s, 14A of the I.T. Act, 1961 without considering the CBDT Circular No. 5 of 2014 dated 11.02.2014 wherein it was clearly stated that the legislative intention is to allow only that expenditure which is relatable to earning of income and it therefore follows that the expenses which are relatable to earning of exempt income have to be considered for disallowance irrespective of the fact whether such income has been earned during the financialyear or not. ii) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance u/s. 14A of the I.T. Act, 1961 by ignoring t....

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.... that of the Assessing officer be restored." 2. The assessee, upon receipt of notice of hearing, has filed crossobjection. The grounds taken in its cross-objection read as under: - 1. The Assessing Officer [hereinafter referred to as "the AO] erred in making disallowance of Rs. 1,78,44,3407- (i.e. Rs. 1,69,00,1907- out of interest and Rs. 9,44,1507- out of expenses) under section 14A of the Act without giving any specific finding or recording any dissatisfaction with the correctness claim made by assessee in the return of income. 2. The AO erred in disallowing expenses under section 14A of the Act without establishing any nexus between expenses and exempt income; 3. The AO 7 CIT(A) failed to appreciate that dis....

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....rutiny assessment u/s 143(3) vide order dated 17/03/2016 wherein it has been saddled with additional disallowance u/s 14A for Rs. 178.44 Lacs. The said disallowance has been made while computing the income under normal provisions as well as while computing Book Profits u/s 115JB. 6. The assessee has not earned any exempt income during the year. However, still it offered suo-moto disallowance of Rs. 39.23 Lacs u/s 14A while filing its return of income. The Ld. AO, disregarding the fact that the assessee has not earned any exempt income during the year, applied Rule 8D and computed aggregate disallowance of Rs. 217.67 Lacs which comprised-off of interest disallowance u/r 8D(2)(ii) for Rs. 206.16 Lacs and expense disallowance u/r 8D(2)(iii)....