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2020 (10) TMI 49 - AT - Income TaxFinance expenses - Allowable business expenses - CIT(A) deleting the addition made on account of disallowance u/s 14A on the ground that no exempt income was received during the previous year which is against the CBDT circular No. 05/2014 - HELD THAT - Appeal raised by the revenue are not emanating either from the AO s order or from the CIT(A) s order. DR also admitted that these grounds are not emanating from the assessment order, as the additions made by the AO were u/s 40(a)(ia) and 36(1)( va) of the Act and no disallowance/addition was made u/s 14A of the Act. In view of the same, the appeal of the revenue is dismissed as not maintainable. Appeal of the revenue is dismissed.
Issues:
1. Appeal by the revenue for AY 2013-14 against the CIT(A)'s order. 2. Allowance of finance expenses for business purposes. 3. Commercial expediency of finance expenses. 4. Deletion of addition under section 14A due to no exempt income. 5. Maintainability of the revenue's appeal. Analysis: 1. The case involved an appeal by the revenue against the CIT(A)'s order for the assessment year 2013-14. The revenue raised several grounds of appeal, questioning the correctness of the CIT(A)'s decisions. 2. One of the key issues was the allowance of finance expenses by the CIT(A) for the business of the assessee company. The revenue contested the decision, arguing that the expenses were not wholly and exclusively incurred for business purposes. 3. Another issue raised was whether there was commercial expediency for allowing the finance expenses. The CIT(A)'s decision in this regard was challenged by the revenue, questioning the validity of the expenses. 4. The CIT(A) had also deleted an addition made under section 14A due to the absence of exempt income during the previous year. The revenue objected to this deletion, citing a CBDT circular. 5. During the hearing, it was pointed out that the grounds of appeal raised by the revenue did not align with the AO's or CIT(A)'s orders. The revenue's appeal was dismissed as not maintainable due to the lack of connection between the grounds raised and the assessment order. In conclusion, the appeal of the revenue was dismissed by the ITAT Hyderabad, and the order was pronounced in open court on 29th September 2020.
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