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TMI Blog2017 (10) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance under Section 14A could have been made. Regarding the administrative expenses in respect of making such an investment, evidently the investment has been made in the subsidiary company, therefore, no effort in the form of market research, monitoring and seeking paid assistance of professionals in making such investment was needed. Accordingly, we hold that no administrative efforts can be attributed to making of investment in the shares of HAIL, the subsidiary company. On careful consideration of the reasoning given by the AO for making the addition under Rule 8D in the assessment order, we find that the AO has not examined the claim of the assessee in this regard. Moreover, the AO did not consider that investment of ₹ 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and law, the Ld. CIT(A) erred in deleting the addition as the same contradicts the circular no. 5/2014, dated 11.2.2014 which provides for disallowance of the expenditure even where the taxpayer in a particular year has not earned any exempt income. 3. Whether on the facts and circumstances of the case and law, the Ld. CIT(A) erred in deleting the addition as the same is not acceptable that for managing / controlling / handling the investment of ₹ 25,38,30,000/- no expenditure was actually incurred. 4. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing. 2. The brief facts of the case are that the assessee filed return of income declaring total income of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , relied on the finding given in the assessment order for assessment years 2004-05 to 2009-10 in which it was observed that in the absence of names and addresses of the suppliers, the claim of the appellant remained unverifiable. On identical facts in the current year, the assessee was asked to file nature and status of agents, copy of agreements with agents, list of agents and the period since when the agents were working for the company. The AR of the assessee admitted that there was neither any agreement with such agents nor did the company pay any commission to them and such agents kept changing from time to time. On examination of the details filed by the assesse in the form of purchase ledger bill summary, the AO observed that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence held that the claim of the assessee that no expenditure was incurred for earning the dividend income, was incorrect. Accordingly, in view of the provisions of section 14A(2), he invoked the provisions of Rule 8D, and made disallowance of ₹ 1,25,52,405. Thereafter, the income of the assessee was assessed at ₹ 91,63,97,850/- vide order dated 28.3.2013 passed u/s. 143(3) of the Act. 3. Aggrieved with the aforesaid assessment order, assessee preferred an appeal before the Ld. CIT(A), who vide his impugned order dated 30.9.2014 has partly allowed the appeal of the assessee by deleting the additions in dispute. 4. Now the Revenue is aggrieved against the impugned order and filed the present appeal before the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of M/s HAIL where such carcasses are processed/deboned and waste materials removed and only after that net raw material is weighed on which the suppliers are to be paid. Such raw material is then sent to the assessee s factory, where after due processing, the processed meat is exported. In view of the above, it is evident that the investment in the shares of HAIL, the subsidiary company was made for the purpose of core business of manufacturing and export of meat and not for earning dividend from HAIL, which is also evident by the fact that no amount of dividend income was actually received by the assessee since earlier years. In view of the above, the provisions of Section 14A will not apply for such investment as was held by the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y had current year's profit of ₹ 6.85 crores. Under the circumstances, I hold that the new investment of ₹ 6.63 crores made in the shares of M/s HAIL, the subsidiary company was made out of own funds of the assessee and not from the borrowed funds. Accordingly, no disallowance under Section 14A could have been made. 7.1 Regarding the administrative expenses in respect of making such an investment, evidently the investment has been made in the subsidiary company, therefore, no effort in the form of market research, monitoring and seeking paid assistance of professionals in making such investment was needed. Accordingly, we hold that no administrative efforts can be attributed to making of investment in the shares of HAIL, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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