2015 (9) TMI 1699

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....sallowing a sum of Rs. 2,21,204/- u/s 14A of the Act r.w.s. 8D of Income Tax Rules. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of AO in making disallowance of Rs. 2,21,204/- u/s. 14A r.w.s. 8D is bad in law and against the facts and circumstances of the case. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of AO in charging the interest u/s./ 234B of the I.T. Act, 1961. 4. That the appellant craves to leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 2. At the outset, Ld....

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....rce of exempt income. Section 14A of the Income Tax Act cannot be invoked when no exempt income was earned. I find that the case of assessee is fully covered in its favour by the order of the ITAT, Delhi 'E' Bench, decided in the case of M/s Mayank Auto Engineers P Ltd. vs. DCIT (Supra) as well as the decision of the Hon'ble Delhi High Court in the case of CIT Vs Holcim India Pvt. Ltd. (Supra) wherein, the Hon'ble High Court under similar circumstances has held as under: "13. We are confused about the stand taken by the appellant-Revenue. Thus, we had asked Sr. Standing Counsel for the Revenue, to state in his submission raised was that the shares would have yielded dividend, which would be exempt income and therefore, the CIT(....

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....x (Ii) Kanpur, Vs. M/s. Shivam Motors (P) Ltd. decided on 05.05.2014. In the said decision it has been held: "As regards the second question, Section 14A of the Act provides that for the purposes of computing the total income under the Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. Hence, what Section 14A provides is that if there is any income which does not form part of the income under the Act, the expenditure which is incurred for earning the income is not an allowable deduction. For the year in question, the finding of fact is that the assessee had not earned any tax free income. Hence, in the absence of....