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TMI Blog2017 (8) TMI 478X X X X Extracts X X X X X X X X Extracts X X X X ..... me earned by the assessee and the case was taken for revision to disallow the business loss claimed against the property income which was examined by the AO and dropped the assessment proceedings and the Ld. CIT also satisfied that there is no case for revision on account of incorrect set off of business loss. With regard to the issue of disallowance u/s 14A as per the judicial pronouncements no disallowance is called for when there is no exempt income. Therefore, we are of the considered opinion that there is no case for revision of order u/s 263 and accordingly we set aside the orders of the CIT and allow the appeal of the assessee. - I.T.A.No.263/Vizag/2014 - - - Dated:- 23-6-2017 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI D.S. SUN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of ₹ 9,18,813/- was debited towards interest. 4. However, having godown rent as the only source of income by the assessee and the same was offered under the head income from house property , claiming of interest paid on unsecured loans and depreciation as business loss is not correct since these loans were neither used for business activity nor for acquiring the asset / godown. Therefore, the claim of loss under the business head is incorrect. 3. The Ld. CIT after considering the submission made by the assessee passed an order u/s 263 directing the assessing officer to verify the disallowance required to be made u/s 14A of IT Act since the assessee has made investments in M/s Bhaskara Exims, Manasa Quality Enterprises, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,11,822/- relating to the business against the income from house property. This issue has been examined by the assessing officer in the original assessment order passed u/s 143(3) which is evident from the show cause notice issued by the assessing officer dated 13.09.2011. The assessing officer proposed to disallow the loss claimed by the assessee vide show cause notice since there was no business carried on by HUF. However, the assessee replied vide letter dated 20.10.2011 explaining that he was carrying on the business and the loss was due to the payment of interest to firms, in which the assessee was a partner and hence resulting loss was business loss which was claimed as set off against the other sources. The assessing officer after c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he investments made in shares and bonds and did not give any finding with regard to the disallowance u/s14A, the CIT 6. We have heard the rival submissions and perused the material on record. The assessee has rental income from godowns and the business loss. The assessing officer has completed the assessment u/s 143(3) by order dated 04.11.2011. The Ld.CIT has called for the record u/s 263 and issued the notice for revision for incorrect set off of business loss against the rental income. After verification of the material on record, the Ld.CIT has dropped the issue with regard to incorrect set off of business loss against the income from property which was examined by the assessing officer. During the course of revision proceedings, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009-10. Hence, the assessee argued before the Ld.CIT that Section 14A is not applicable in assessee s case. As per the observation of the Ld.CIT, the assessee made the investments to the tune of ₹ 19,90,625/- in shares and bonds from the borrowed funds and the interest expenditure relating to the earning of Court in Redington (India) Ltd. Vs. Addl.CIT, 77 taxman.com 257, dividend income is required to be disallowed u/s 14A. Though CIT opined that the expenditure relating to the earning of dividend income required to be disallowed, there was no finding given by the CIT in his order with regard to earning of dividend income. The CIT also did not rebut the explanation offered by the assessee stating that no expenditure was incurred for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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