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TMI Blog2019 (2) TMI 1356X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Departmental Representative. We uphold the decision of the learned Commissioner (Appeals) in deleting the disallowance made under section 14A of the Act only on the proposition that in absence of any exempt income earned by the assessee in the relevant assessment year no disallowance under section 14A of the Act can be made. Ground raised is dismissed. - ITA no. 5234/Mum./2017 - - - Dated:- 30-1-2019 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For the Appellant : Shri Shushil Kumar Poddar For the Respondent : Shri Dinkle Haria ORDER PER SAKTIJIT DEY, J.M. This appeal has been filed by the Revenue challenging the order dated 14TH June 2017, passed by the learned Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y exempt income, deleted the disallowance made by the Assessing Officer. Of course, while doing so, the learned Commissioner (Appeals) also observed that since the investments were made for strategic purpose, the provisions of section 14A of the Act will not apply. 5. Shri S.K.Poddar, learned Departmental Representative submitted, irrespective of the fact that the assessee has not earned any exempt income in the relevant previous year, disallowance under section 14A r/w rule 8D has to be made. In support of his contention, the learned Departmental Representative relied upon the following decisions: i) M.A. Alagappan v/s ACIT, [2017] 82 taxmann.com 276 (Chh.); ii) Maxopp Investments Ltd. v/s CIT, 91 taxmann.com 154 (SC); iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Realty Pvt. Ltd., [2018] 100 taxmann.com 294 (Mum. Trib.); xii) Pyramid Consulting Engineers Pvt. Ltd. v/s DCIT, [2018] 90 taxmann.com 411 (Mum. Trib.); and xiii) ACIT v/s Janak Global Resources Pvt. Ltd., ITA no.470/Chd./ 2018, order dated 16.10.2018 (Chd. Trib.). 7. We have considered rival submissions and perused material on record. The primary and fundamental issue which arises for our consideration is, if in the relevant assessment year the assessee has not earned any exempt income, whether disallowance under section 14A r/w rule 8D can at all be made? On a careful reading of section 14A of the Act we are of the view that disallowance of expenditure under the said provision can be made only if the assessee has earned exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act can be made if the assessee has not earned any exempt income in the relevant assessment year. In this context, following decisions can be referred to. i) ACIT v/s Gini Jony Ltd., [2018] 172 ITD 472 (Mum. Trib.); ii) ACIT v/s Dish TV India Ltd. [2018] 194 TTJ 897 (Mum.); iii) DCIT v/s Instant Traders Pvt. Ltd. [2018] 96 taxmann. com 378 (Mum.); iv) DCIT v/s Piramal Realty Pvt. Ltd., [2018] 100 taxmann. com 294 (Mum. Trib.); and v) Pyramid Consulting Engineers Pvt. Ltd. v/s DCIT, [2018] 90 taxmann.com 411 (Mum. Trib.). 8. Thus, as per the ratio laid down in the aforesaid decisions, if no exempt income is earned by the assessee in the relevant assessment year, provisions of section 14A of the Act cannot be invoked. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dominant or main object would be a relevant consideration in determining as to whether expenditure incurred is 'in relation to' the dividend income. In most of the appeals, including in Civil Appeal Nos. 104-109 of 2015, aforesaid is the scenario. Though, in some other cases, there may be little difference in fact situation. However, all these cases pertain to dividend income, whether it was for the purpose of investment in order to retain controlling interest in a company or in group of companies or the dominant purpose was to have it as stock-in-trade. 9. On a thorough and careful reading of the aforesaid judgment of the Hon'ble Supreme Court we are unable to locate any observation / ratio laid down by the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8D, the investments not giving raise to any exempt income in the relevant assessment year have to be excluded. Thus, in view of the ratio laid down in the decisions of different High Courts including Hon'ble Jurisdictional High Court in Ballarpur Industries Ltd. (supra), as referred to above as well as the Special Bench decision of the Tribunal, Delhi Bench, in Vireet Investment Pvt. Ltd. (supra) and other decisions referred to above, it has to be concluded that in the absence of any exempt income earned in the relevant assessment year, no disallowance under section 14A of the Act can be made. Further, being bound by the decision of the Hon'ble Jurisdictional High Court as well as other High Courts as referred to above, we are unabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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