TaxTMI 
TaxTMI 
2025 (3) TMI 1824
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.... Revenue against different orders of the Ld. CIT(Appeals)-24, New Delhi for the assessment years 2016-17, 2017-18 & 2018-19. 2. In so far as the Revenue's appeal is concerned i.e. ITA No.386/Del/2024 for the AY 2017-18 Ld. Counsel submits that dispute in Revenue's appeal is with respect to disallowance u/s 14A of Rs. 77,90,200/- as per rectification order dated 21.01.2020 and the Revenue impact in this appeal is less than Rs. 60 lakhs and therefore in view of Board Circular appeal of the Department is not maintainable. The case of the Department would not fall in the exceptions provided in the above Board Circulars. This appeal is not maintainable to which the Ld. DR fairly agreed. 3. The Ld. Counsel for the assessee further submits t....
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....D without recording any satisfaction on the incurring of expenses by the assessee even though the assessee had filed a detailed submission explaining why there is no expenditure incurred in earning dividend income. As a matter of fact we observe that for the AY 2018-19 the assessee in its submission before the Assessing Officer stated that it had not earned any exempt income during that year. We observe that an identical issue came up for adjudication in assessee's own case for the AY 2009-10 to 2011-12 wherein the Tribunal held as under: "21. AO/CIT(A) made disallowance of Rs. 40.79 lakhs Rs. 45.60 lakhs & Rs. 4.71 lakhs for AYs 2009-10, 2010-11 & 2011-12 respectively by invoking the provisions contained u/s 14A of the Act r/w Rul....
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....enditure has been incurred to earn the dividend income except with general observations that, "a company cannot earn dividend without its existence and management. Investment decisions are very complex in nature which are generally taken by management personnel or other professional experts employed for the purpose for which administrative, managerial and administrative expenses are incurred." 22.1 To our mind, this is no satisfaction rather AO proceeded on the basis of assumptions and guesswork. In AY 2011-12, AO while invoking the provisions contained under Rule 8D recorded that, "since the assessee has not maintained any separate books of account for accounting of expenses incurred in relation to income not includible in its tot....
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....ing, would become applicable." 24. Hon'ble Delhi High Court in case of HT Media Ltd. vs. Pr. CIT (supra) also held that broad and general nature of observation made by the AO are not enough to invoke the provisions contained under Rule 8D. So, we are of the considered view that when AO has failed to comply with the mandatory provisions of section 14A(2) of the Act r/w Rule 8D(1)(a) of the Rules to record a valid satisfaction, provisions contained under Rule 8D(2)(iii) cannot be invoked. 25. Moreover, it is categoric case of the assessee company that it has invested in debt oriented mutual fund as is evident from page 41 of the paper book for AY 2009-1-. So, this investment has earned taxable income in the capital gain ....
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....aid by the assessee on redemption of premium notes (OCPN) utilized for making investment in the shares/debentures of RUPL cannot be regarded as expenditure incurred exclusively in relation to earning of exempt income so as to invoke the provisions of section 14A. Moreover, the said investment had the potential of generating taxable income also as explained by the learned counsel for the assessee in the form of short term capital gains etc. In this regard, the learned DR has submitted that no such taxable income however was actually earned by the assesses during the years under consideration. The learned counsel for the assessee on the other hand has pointed out that no exempt income from the said investment was also actually earned by the a....