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TMI Blog2016 (4) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... ismiss the Appeal filed by the Revenue by holding that the provisions of Section 14A is not applicable in the case of the assesse, because the Assessee Company has not claimed any exempt income during the relevant assessment year and therefore, no disallowance u/s 14A of the Act is permissible. - Decided in favour of assessee - ITA No. 5399/Del/ 2012, ITA No. 5684/Del/2012 - - - Dated:- 4-4-2016 - Shri N. K. Saini, Accountant Member And Shri H. S. Sidhu, Judicial Member For the Petitioner : Sh. R.M. Mehta, CA For the Respondent : Sh. V.R. Sonbhadra, Sr. DR ORDER Per Bench These are the Cross Appeals filed by the Assessee and Revenue against the impugned order dated 21.8.2012 pertaining to assessment year 2009-10. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The Ld. CIT(A) has erred on facts and circumstances of the case and in law in giving relief of ₹ 1,29,46,714/- to the assessee by ignoring section 14A read with Rule 8D of the Income Tax Act, 1961. 3. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing. 4. The brief facts of the case are that the Assessee filed its Return of Income of ₹ 6,870/- on 30-09-2009. The same was processed under section 143(1) of the Income Tax Act, 1961 (hereinafter referred Act ) on 24-01-2011. The AO selected the case for scrutiny by issue of notice under section 143(2) of the Act dated 19-08-2010. The AO also issued detailed questionnaire on 20-10-2010 as well as various notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year and there has been no further investments as well as borrowings during the relevant assessment year. 4.2 The AO considered the reply of the Assessee and held while invoking the provisions of section 14A, it is not necessary that the investments yield any exempted income during the year under consideration. Since the money borrowed had been utilized in the purchase of shares held as investment, the interest paid on so borrowed monies is allowable against the income from dividend on such shares irrespective of whether or not there is any yield of dividend on the shares purchased and held as investment. In other words, in such a case, the interest is attributable to or relatable to earning of dividend on the shares purchased and hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities below. 8. We have heard both the parties and perused the orders of the revenue authorities alongwith the order dated 02.9.2015 passed by the Hon ble High Court of Delhi in the case of Cheminvest Limited vs. Commissioner of Income Tax-VI (Supra). For the sake of convenience, we would like to reproduce the following questions of law framed by the Hon ble High Court on the issue in dispute and its answer, as mentioned in para nos. 3 23 at page 1-2 13 respectively of the aforesaid Order. 3. The following substantial question of law is arises for determination: Whether disallowance under Section 14A of the Act can be made in a year in which no exempt income has been earned or received by the Assessee? 23. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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