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TMI Blog2017 (6) TMI 864X X X X Extracts X X X X X X X X Extracts X X X X ..... h is contrary to the decision of the Special Bench of the Tribunal in the case of Cheminvest Ltd. (2009) 121 ITD 318 (Del.)(SB), in which the Bench relied upon the decision from Hon'ble Apex Court in the case of Rajendra Prasad Moody 115 ITR 522 (SC). 2.1. During hearing of this appeal, the ld. DR, Shri T.A. Khan, defended the addition made by the Assessing Officer and thus supported the conclusion arrived at in the assessment order. On the other hand, Shri Sunil M. Lala, ld. counsel for the assessee, contended that section 14A of the Act will not apply where no exempt income is received during the relevant previous year and thus, defended the conclusion arrived at in the impugned order by placing reliance upon various decisions mentioned in the paper book and more specifically the following decisions:- i. Cheminvest Ltd. vs CIT (2015) 61 taxman.com 118(Del.) ii. SM Energy Teknik and Electronics Ltd. vs DCIT (2015) 61 taxman.com 448 (Mum. ITAT) iii. CIT vs Delite Enterprises (ITA No.110 of 2009) (Bom.) iv. Quality Engineering and Software technologies Ltd. vs DCIT(2015) 152 ITD 320 (Bang.) and v. Anriya Project Management Services Pvt. Ltd. vs DCIT TS-99-ITAT-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case, the assessee has not earned any tax free income, hence the provision of section 14A of the Act, will not be applicable. The ratio laid down in ACIT Lafarge India Holding Pvt. Ltd. (19 SOT 121) (Mum. Trib.), Winsome Textiles Industries Ltd. (319 ITR 204)(P & H) supports our view. It is noted that the ld. Assessing Officer disallowed one half percent of the investment, which works out to Rs. 4,55,99,525/- u/s 14A of the Act, r.w.r 8D of the Rules. The investments were claimed to be made out of owned funds and there was no borrowing by the assessee and further the assessee made investment in group companies as a strategic investment. As claimed by the assessee, the assessee made suo-moto disallowance of Rs. 35,44,521/- and the assessee earned Rs. 42,27,384/-, whereas, the Assessing Officer made disallowance of Rs. 69,70,878/-. It is also noted the administrative and support service expenses incurred on behalf of group companies were recovered from them at cost and the recovery was reflected under the head other income in Schedule-J of profit & loss account/computation of income. As mentioned earlier, suo-moto disallowance was made by the assessee. The assessee has also dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that the Ld. Assessing Officer, while making the disallowance of Rs. 69,70,878/- invoked the provision of section 14A of the Act r.w.r.-8D(2)(iii) of the Rules. We find that the assessee has not claimed any administrative expenses, as deduction, in its computation of income and the expenses of Rs. 69,70,878/- were met out from the group companies, which were recovered from them and showed as other income. The assessee has not claimed any expenses as deduction, thus, there is no question of any disallowance u/s 14A of the Act. It is also noted that, as claimed by the assessee, in respect of investment in group companies, the assessee has not received any dividend income and these investments were made in earlier Financial Years out of owned funds and thus the assessee has not incurred any expenditure in relation to the investment in group companies. In the light of the foregoing discussion, while disposing of the appeal for Assessment Year 2008-09, the decision of Hon'ble Punjab & Haryana High Court in Hero Cycles Ltd. (ITA No.331 of 2009), Walfort Shares & Stock Brokers Ltd. vs Income Tax Officer (2008) 326 ITR 1 (SC), Yatish Trading Co. Ltd. vs ACIT (2011) 122 ITD 237 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o legalize in justice on technical grounds but because it is capable of removing injustice and is expected to do so. 4.2. The Hon'ble Apex Court in a celebrated decision in Collector, Land Acquisition vs Mst. Katiji & Ors. 167 ITR 471 opined that when technical consideration and substantial justice are pitted against each other, the courts are expected to further the cause of substantial justice. This is for the reason that an opposing party, in a dispute, cannot have a vested right in injustice being done because of a nondeliberate delay. Therefore, it follows that while considering matters relating to the condonation of delay, judicious and liberal approach is to be adopted. If sufficient cause is found to exist, which is bona-fide one, and not due to negligence of the assessee, the delay needs to condoned in such cases. The expression 'sufficient cause' is adequately elastic to enable the courts to apply law in a meaningful manner, which sub-serves the end of justice- that being the life purpose of the existence of the institution of the courts. When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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