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TMI Blog2018 (1) TMI 1287X X X X Extracts X X X X X X X X Extracts X X X X ..... uthorities to suggest that in the relevant previous year, the assessee had earned any exempt income. Therefore, prima–facie, the assessee’s claim that it has not earned any exempt income in the relevant previous year appears to be correct. - Decided in favour of assessee Addition made on account of alleged bogus purchase - addition relying upon the information obtained from the Sales Tax Department - Held that:- AO has not made any independent enquiry or investigation to find out the existence of the concerned parties or the genuineness of purchases. It is also a fact on record that the Assessing Officer has not doubted the sales effected by the assessee in the relevant previous year. Moreover, on identical facts and circumstances, addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income on 24th September 2010, declaring loss of ₹ 3,38,54,100. During the assessment proceedings, on verifying the Balance Sheet of the company for the relevant financial year the Assessing Officer found that the assessee has invested an amount of ₹ 3,05,83,750, in the shares of Annakoot Properties Pvt. Ltd., income from which shall not form part of the total income. Therefore, he called upon the assessee to explain why disallowance of expenditure attributable to the investment made in exempt income yielding asset should not be disallowed. Though, the assessee objected to the proposed disallowance, however, the Assessing Officer rejecting the submissions of the assessee proceeded to disallow an amount of ₹ 18,99,281 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot earned any exempt income in the relevant previous year appears to be correct. Notably, while deciding assessee's appeal against disallowance made under section 14A r/w rule 8D under identical facts and circumstances in the assessment year 2011-12, the Co-ordinate Bench vide order dated 22nd March 2017, passed in ITA no.4161/Mum./2015, has held as under:- "7. We have heard rival contentions of the parties and perused the material available on record. The specific contention of the learned Authorised Representative while challenging the disallowance under section 14A r/w rule 8D is, the assessee having not earned any dividend income during the previous year no disallowance can be made. As could be seen from the assessment order, the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt reversing the decision of the Tribunal, Delhi, Special Bench (supra), held that if the assessee had not earned any exempt income in a particular assessment year no disallowance under section 14A can be made. Applying the aforesaid ratio laid down by the Hon'ble Delhi High Court, we hold that no disallowance under section 14A r/w rule 8D can be made. Accordingly, we delete the addition made by the Assessing Officer. In view of our aforesaid decision, there is no need to deliberate upon the other propositions raised in the ground on this issue." 8. It is also relevant to observe, the Hon'ble Jurisdictional High Court has also expressed similar view in case of PCCIF-3, Civil Lines, Nagpur v/s Ballarpur Industries Ltd., ITA no.51/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d merely relying upon the information obtained from Sales Tax Department has made the addition. He submitted, under identical facts and circumstances, in assessee's own case for assessment year 2011-12, the Tribunal has restricted the disallowance to 12.5% of the bogus purchase. He, therefore, submitted, in the impugned year also the disallowance can be restricted to 12.5%. 14. Learned Departmental Representative relying upon the order of the learned Commissioner (Appeals) submitted, the assessee has not furnished transportation bills / delivery challan to prove the delivery of goods, therefore, addition made is justified. 15. We have heard rival contentions and perused the material available on record. From the facts on record, it is evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r (Appeals) also confirmed the disallowance. 2. We have heard rival contentions and perused the material available on record. As could be seen from the facts on record, employee's contribution to PF/ESIC were paid by the assessee much before the due date of filing of return of income as provided under section 139(1) of the Act. That being the case, as per ratio laid down by the Hon'ble Jurisdictional High Court in CIT v/s Hindustan Chemicals Organics Ltd., 366 ITR 001 (Bom.), no disallowance can be made keeping in view the amendment brought to section 43B of the Act. In view of the aforesaid, we delete the addition made by the Assessing Officer. This ground is allowed. 3. In the result, assessee's appeal is partly allowed. Order pron ..... X X X X Extracts X X X X X X X X Extracts X X X X
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