2016 (2) TMI 1213

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..... e Supreme Court in the case of CIT vs Rajendra Prasad Moody [1978 (10) TMI 133 - SUPREME COURT]. Thus we hold that, no disallowance u/s 14A is called for, once there is no exempt income received or receivable by the assessee during the relevant previous year. Accordingly, the ground raised by the assessee is treated as allowed.
SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER For the Appellant : Shri Salil Kapoor, Aarsi Prasad & Shri Rajesh Kumar For the Respondent : Aarsi Prasad & Shri Rajesh Kumar, Shri Salil Kapoor ORDER PER AMIT SHUKLA, JM: The aforesaid cross appeals have been filed by the two different assessees as well as by the revenue against separate impugned orders of even date, 10.02.2012 passe .....

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..... rned any exempt income, then no disallowance under section 14A can be made. 4. On the other hand, Ld. DR submitted that there is a Board Circular No.5 of 2014 dated 11.02.2014, wherein the Board has clarified that, the expenses which are relatable to earning of exempt income would be considered for disallowance irrespective of the fact that, whether any income has been earned during the financial year or not. He also filed a copy of decision of the ITAT dated 31st July, 2014 in the case of Double Dot Financial Ltd. vs DCIT, reported in [2014] 40 taxman.com 291 (Mum Trib), wherein the Tribunal has upheld the disallowance and stated that, even if no exempt income has resulted to the assessee, then also disallowance under section 14A can be m .....

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..... eme Court in Rajendra Prasad Moody (supra) was rendered in the context of allowability of deduction under Section 57(iii) of the Act, where the expression used is 'for the purpose of making or earning such income'. Section 14A of the Act on the other hand contains the expression 'in relation to income which does not form part of the total income'. The decision in Rajendra Prasad Moody (supra) cannot be used in the reverse to contend that even if no income has been received, the expenditure incurred can be disallowed under Section 14A of the Act. 22. In the impugned order, the ITAT has referred to the decision in Maxopp Investment Ltd. (supra) and remanded the matter to the AO for reconsideration of the issue afresh. The issue in Maxopp In .....

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