9911796707
TMI Blog2019 (11) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... directed the Assessing Officer to exclude the investments made in the subsidiary companies from the scope of disallowance under Section 14A of the Income-tax Act, 1961 (in short 'the Act') by following his predecessor's order in the assessee's own case for the assessment year 2013-14. Referring to the judgment of Apex Court in Maxopp Investment Ltd. v. CIT (2018) 402 ITR 640, the Ld. D.R. submitted that even to the investments in subsidiary companies, the provisions of Section 14A would be applicable. Referring to Rule 8D(2)(iii) of Income-tax Rules, 1962 as it stood at the relevant point of time, the Ld. D.R. submitted that the expenditure incurred by the assessee in earning exempted income irrespective of the fact whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the Ld. D.R. that the word "does not" or "shall not" in Rule 8D(2)(iii) indicates that the provisions of Section 14A is applicable even though there was no income during the current year but it has potential to earn income in the subsequent year has to be considered for disallowance, the Ld.counsel submitted that a Special Bench of Delhi Bench of this Tribunal in ACIT v. Vireet Investment (P.) Ltd. (2017) 165 ITD 27 had an occasion to consider this issue and found that unless there is an exempted income earned by the assessee, there cannot be any disallowance. According to the Ld. counsel, the Special Bench has specifically considered the word "does not" and "shall not" which occur in provisions of Rule 8D(2)(iii). Therefore, accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Vireet Investment (P.) Ltd. (supra), what is to be considered is only the investments which result in exempted income during the year under consideration. The Madras High Court in Redington (India) Ltd. (supra), after considering provisions of Section 14A of the Act, found that only those investments are to be considered for computing average value of investments which yielded exempted income. The judgment of Madras High Court was followed by this Tribunal in M/s Real Talent Engineering Pvt. Ltd. (supra). In view of the above, this Tribunal finds no merit in the contention of the Ld. D.R. 6. In view of the decision of Special Bench in Vireet Investment (P.) Ltd. (supra), the decision of Hyderabad Bench in Bellwether Microfinance F ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
