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TMI Blog2014 (6) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... er, all these expenses get merged with the expenses claimed by the assessee. In view of the above and applying the provisions of section 14A r.w. Rule 8D, the Assessing Officer worked out the disallowance of ₹ 25,10,262/- u/s.14A which is as under : Disallowance u/s.14A on account of interest expenses 19,23,300 +0.5% of the average value of investment 5,86,962/- TOTAL 25,10,262 5. In appeal the Ld.CIT(A) deleted the addition of ₹ 19,23,300/- u/s.14A being interest expenses for which the Revenue is no in appeal. Therefore, we are not concerned with the same. He however upheld the order of the Assessing Officer in disallowing ₹ 5,86,962/- by observing as under : "38. So far as the disallowance under sub-rule 2(2)(ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brokerage, De-mat charges have not been incurred at all. In view of this disallowance cannot be sustained. 1.2 The learned CIT (A) should have appreciated the fact that during the current year there is no dividend income from unlisted shares which does not form part of total income; therefore, the disallowance made by the learned AO cannot be sustained." 7. The Ld. Counsel for the assessee referring to page 23 of the paper book drew the attention of the Bench to the share trading account and submitted that the assessee has earned dividend income of ₹ 12,49,008.74 in share trading account. Referring to page 25 & 26 of the paper book he drew the attention of the Bench to the details of investment in shares as on 31-03-2009 and submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Gujarat High Court in the case of CIT Vs. Corrtech Energy Pvt. Ltd. vide Tax Appeal No.239/2014 order dated 24- 03-2014 he submitted that the Hon'ble High Court in the said decision has upheld the decision of the Tribunal in deleting the disallowance u/s.14A since no claim was made by the assessee for exemption of any income from payment of tax. He submitted that during the preceding as well as succeeding assessment years there is also no disallowance u/s.14A. He accordingly submitted that since the assessee has not received any dividend income out of the share held as investment and since no disallowance has been made in the preceding as well as succeeding assessment years, therefore, disallowance of ₹ 5,86,962/- sustained by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e expenses etc. is concerned we find the CIT(A) sustained the same. 9.1 It is the submission of the Ld. Counsel for the assessee that all the shares are held in physical form and not in Demat account and no dividend income has been received on account of shares held under the head "investment". Whatever dividend was received was in the "share trading account". The above submission of the Ld. Counsel for the assessee could not be controverted by the Ld. Departmental Representative. We find various courts have held that disallowance u/s.14A cannot be made when there is no tax free income. 9.2 We find the Hon'ble Allahabad High Court in the case of Shivam Motors Pvt. Ltd.(Supra) has observed as under : "As regards the second question, Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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