2020 (10) TMI 1381

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....isdiction and various other reasons and hence the same may kindly be quashed. 2. Rs. 5,18,894/-: The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the disallowance of Rs. 5,18,894/- u/s 14A. hence, the disallowance so made by the ld. AO and sustained by the ld. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence the penalty may kindly be deleted in full. 3. The appellant prays your honors indulgence to add, amend or alter all or any of the grounds of the appeal on or before the date of hearing." 2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. Brief facts of t....

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.... 1. That the main activity of the company is of manufacturing malt and gross receipts of Rs. 19,12,36,713/-. 2. That the company has earned income from dividend which is an exempt income of Rs. 85898/- which is very negligible in comparison to overall operation of the company. 3. That gross receipts of the company was Rs. 19,12,36,713/-, and the exempted income by way of dividend was merely Rs. 85,898/- which is 0.044% of gross revenue of the company. 4. Further the company has invested its own and spare funds in the shares of the listed companies and there were hardly 10- 15 transactions during the year in relation to the investment activity and on which the company has earned the short term capital gain ....

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.... 7. Later on the above view is also accepted by the department through notification no. S.O. 1949(E) dated 02.06.2016 in which it is explicitly mentioned that interest would not be disallowed under section 14A even if it is not directly attributable to any other income. Hence in view of the facts of the case and submission made herein above the disallowance made of Rs. 518894 / is without any basis, illegal, bad in law and against the principal of natural justice. We pray you to kindly delete the above disallowance or restrict the disallowance up to the amount of dividend of Rs. 85898/-." 6. On the other hand, the ld DR has relied on the orders of the authorities below. 7. We have heard the ld. Counsels of both the partie....