TaxTMI 
TaxTMI 
2014 (11) TMI 1274
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.... to Rs. 20,70,770/-, the revenue has filed this appeal before us. 2. The facts relating to the issue cited above are discussed in brief. The assessing officer, having noted that the assessee has held investments and had also borrowed funds, asked the assessee to work out the disallowance to be made u/s 14A of the Act read with Rule 8D of the I.T Rules. It is pertinent to note that the assessee did not make any disallowance u/s 14A of the Act in its return of income. The assessee furnished the workings as per which a sum of Rs. 1,51,35,812/- was disallowable and the same pertained to Administrative expenses only. The assessing officer accordingly made disallowance of the above said amount. In the appellate proceedings before Ld CIT(A), th....
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....d that the disallowance u/s 14A is required to be made even if the assessee did not receive any dividend. Accordingly, the Ld D.R submitted that the Ld CIT(A) was not justified in reducing the disallowance made as per Rule 8D of IT Rules. 5. On the contrary, the Ld A.R submitted that the provisions of sec. 14A shall not apply, since the assessee did not receive any dividend at all during this year. For this proposition, the Ld A.R placed reliance on the following case law:- (a) Jt. CIT Vs. Shivam Motors Pvt Ltd (ITA No.17/Lkw/2012 dt. 12.11.13) (b) CIT Vs. Cortech Energy Pvt Ltd (2014)(223 Taxmann 130)(Guj) (c) CIT Vs. M/s Lakhani Marketing Inc. (ITA No.970/2008 dt.2.4.14) (d) CIT Vs. Holcim India P Lt....
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....s" and the same is exempt u/s 10(2A) of the Act. The Ahmedabad bench of Special bench in the case of Vishnu Anant Mahajan Vs. CIT (137 ITD 189) has held that the provisions of sec. 14A shall be applicable to the share income received from partnership firms also. 7. However, in the instant case, we notice that the assessing officer does not appear to have examined the application of the provisions of sec,. 14A by having regard to the accounts of the assessee. We notice that the assessing officer has asked the assessee to work out the disallowance and accordingly, the assessee has furnished following workings:- Average Investments:- Opening Investments &nbs....
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....bsp; ============ Closing Investments 655,67,45,571 Less:- Share of Profit in Partnership firm included as capital account (reduced since does not represent investment) 277,05,73,226 &n....
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....estment made in two other partnership firms. It is pertinent to note that the assessee has taken a stand that the investment made in partnership firm does not represent "Investment". We notice that the assessing officer did not examine the above said claim of the assessee and also failed to note the inconsistencies in working out the average value of investments. All these discussions would show the half hearted approach adopted by the assessing officer and his carelessness in examining the workings furnished by the assessee vis-à-vis the accounts of the assessee company. We also find that the assessee has also failed to explain as to how the provisions of sec. 14A shall not apply to the share income from partnership firms, which con....