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TMI Blog2016 (10) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The only issue in this appeal of the Revenue is against the order of the CIT (A) in directing the AO to restrict the disallowance of expenses quo the exempted income at Rs. 1,16,03,269/- as against the disallowance made by the AO at Rs. 6,95,98,750/- by invoking the provisions of Section 14A of the Act read with Rule 8D of the Income Tax Rules, 1963 (hereinafter "the Rules") 3. We have heard the rival contentions and gone through the facts and circumstances of the case. Brief facts leading to the above issue are that the AO noticed that the assessee has incurred expenditure in relation to income not includible in total income u/s 14A of the Act and thereby applying Rule 8D of the Rules made disallowance of expenses quo exempted income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year." 4.1 Further, we find that the Hon‟ble Punjab & Haryana High Court in the case of CIT Vs Lakhani Marketing Inc. [2014] 49 taxmann.com 257 (Punjab & Haryana) has considered this issue vide Para 10 of the judgment by observing as under:- "10. Vide order dated 16.5.2008, Annexure A.III, the Tribunal on appeal by the revenue while upholding the finding recorded by the CIT(A) noticed as under:- (a) That there must be incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f it inasmuch as the entire income of the assessee is taxable under the Act. Section 14A is applicable only when any part of the income is not to be included in the total income of the assessee and the expenditure relating to that part of income is claimed by the assessee as deduction. In such cases only, the expenditure relating to the exempted income can be disallowed and not otherwise. Since in the present case, the entire income is found to be taxable, no disallowance can be made under section 14A of the Act." 4.2 Further, the Hon‟ble Allahabad High Court in the case of CIT Vs Shivam Motors (P) Ltd. [2015] 55 taxmann.com 262 (Allahabad) has decided this issue vide Para 10 of the judgment by observing as under:- "10. As regard ..... X X X X Extracts X X X X X X X X Extracts X X X X
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