2023 (8) TMI 37

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..... 2. In this appeal, the Revenue has raised the following grounds:- "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance u/s 14A without considering the fact that the assessee has earned exempt income and assessing officer has rightly invoked the section 14A read with rule 8D. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance u/s 14A without appreciating the fact that circular no.5/2014 issued by CBDT categorically mandates the disallowance of expenditure for earning exempt income u/s 14A r.w.r. 8D even if the corresponding exempt income has not been earned during the year. 3. ....

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....880, which was claimed as exempt. It was further observed from the computation of income and Form 3CD that the assessee has not disallowed any sum under section 14A of the Act. Accordingly, the assessee was asked to show cause as to why the disallowance under section 14A read with Rule 8D be not made and added to the total income of the assessee. In response thereto, the assessee submitted that the shares were held in the group concerns only as a passive investment for the purpose of holding a controlling stake and therefore provisions of section 14A of the Act are not applicable. On a without prejudice basis, the assessee submitted that the disallowance be restricted to the total exempt income of Rs. 9,55,880. The Assessing Officer ("AO") ....