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TMI Blog2015 (2) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. I.T.A.No. 486 and 299/2014 decided by Hon'ble Delhi High Court placed in paper book pages 9A-9M. CIT Vs Shivam Motors (P) Ltd. I.T.A.No. 88 of 2014 placed at paper book pages 10-16. CIT Vs Corrtech Energy Pvt. Ltd. I.T.A.No. 239/2014 placed at paper book pages 17-21 CIT Vs M/s. Lakhani Marketing Incl. I.T.A.No. 970/2008 placed at paper book pages 22-28 CITVs Delite Enterprises its 110/2009 placed at paper book pages 29-30 CIT Vs Mr. M. Baskaran I.T.A.No. 1717/Mds.2013 paper book pages 31-41. 2. Ld. A.R. submitted that admittedly, no dividend was received by the assessee in the present year and, therefore, disallowance u/s14A was not warranted as held in the above mentioned decisions. 3. Regarding the 2nd issue, Ld. A.R. submitted that this issue is also covered in favour of the assessee and in this respect; he invited our attention to page 7 para 16 of the tribunal order in the case of the assessee itself in Assessment Year 2008-09. 4. Ld. D.R. on the other hand submitted that there is a Kerala High Court decision in the case of South Indian Bank Vs CIT 49 Taxman.Com 100 wherein, it has been held that for making disallowance u/s 14A earning of dividend is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in Commissioner of Income Tax, Faridabad Vs. M/s. Lakhani Marketing Incl., ITA No. 970/2008, decided on 02.04.2014, made reference to two earlier decisions of the same Court in CIT Vs. Hero Cycles Limited, [2010] 323 ITR 518 and CIT Vs. Winsome Textile Industries Limited, [2009] 319 ITR 204to hold that Section 14A cannot be invoked when no exempt income was earned. The second decision is of the Gujarat High Court in Commissioner of Income Tax-I Vs. Corrtech Energy (P.) Ltd. [2014] 223 Taxmann 130 (Guj.). The third decision is of the Allahabad High Court in Income Tax Appeal No. 88 of 2014, Commissioner of Income Tax (Ii) Kanpur, Vs. M/s. Shivam Motors (P) Ltd. decided on 05.05.2014. In the said decision it has been held: "As regards the second question, Section 14A of the Act provides that for the purposes of computing the total income under the Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. Hence, what Section 14A provides is that if there is any income which does not form part of the income under the Act, the expenditure which is incurred for earni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilarly, Hon'ble Allahabad High Court in the case of Shivam Motors in I.T.A.No. 88/2014 has held as under: "15 As regards the second question, Section 14A of the Act provides that for the purposes of computing the total income under the Chapter, no , deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under the Act. Hence, what Section 14A provides is that if there is any income which does not form part of the income under the Act, the expenditure which is incurred for earning the income is not an allowable deduction. For the year in question, the finding of fact is that the assessee had not earned any tax free income. Hence, in the absence of any tax - free income, the corresponding expenditure could not be worked out for disallowance. The view of the CIT(A), which has been affirmed by the Tribunal, hence does not give rise to any substantial question of law. Hence, the deletion of the disallowance of Rs. 2,03,752/- made by the Assessing Officer was in order." 5.3 From the above decision of Hon'ble Delhi High Court we find that Hon'ble High Court has considered various case laws f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usiness, cannot be held to be investment per se. The decision making of a business man by way of strategy planning in allied line of business is a decision made in the course of carrying on the business and the Assessing officer cannot sit in judgment seat to comment upon the same. Once the assessee has been found to have made a business investment by way, of shares in related line of business, the said investment though held by way of shares in the said company cannot be subjected to disallowance under section 14A of the Act, which in any case is relatable to disallowance of the expenditure out of the exempt income earned by the assessee, by way of its investment in shares of other company. In the facts of the present case the investment was purely of business nature as the company in which the amount was invested was a loss making company and there was no question of earning any dividend income from such investment. In the totality of the facts and circumstances of the case we find no merit in the order of the authorities below in disallowing any expenditure under the garb of section 14A of the Act". 17. Identical facts are involved in the present case in hand, as in this case a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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