9911796707
TMI Blog2021 (1) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... , Chennai, 'B' Bench ('the Tribunal' for brevity) for the assessment year 2010-11. 2. The assessee has filed this appeal by raising the following substantial questions of law : "1. Whether, under the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in upholding the disallowance made under Section 14A of the Income Tax Act ? And 2. Whether, under the facts and circumstances of the case, the disallowance under Section 14A could exceed the income not includable in the total income ?" 3. We have heard Mr.N.V.Balaji, learned counsel assisted by Mr.N.V.Narayanan, learned counsel appearing for the appellant and Mr.Karthik Ranganathan, learned Standing Counsel assisted by Mr.Rajesh Sivanandham ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Central Board of Direct Taxes in Circular No. 5 of 2014 dated 11-2- 2014, which has been relied by the Tribunal in the impugned order cannot be upheld and the disallowance under section 14A of the Act cannot go beyond the extent of exempted income itself. Paragraph 12.3 of the said judgment is quoted below for ready reference. "12.3 The reasoning of the Division Bench is contained in the following part of the judgment: "4. The admitted position is that no exempt income has been earned by the assessee in the financial year relevant to the assessment year in issue. The order of assessment records a finding of fact to that effect. The issue to be decided thus lies within the short compass of whether a disallowance in terms of s.14A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 and Rajasthan State Ware Housing Corporation v. Commissioner of Income-tax [2000] 242 ITR 450/109 taxmann. com 145 (SC) in terms of which, expenditure incurred by an assessee carrying on a composite business giving rise to both taxable as well as non-taxable income, was allowable in entirety without apportionment. It was thus that s.14A was inserted providing that no deduction shall be allowable in respect of expenditure incurred in relation to the earning of income exempt from taxation. As observed by the Supreme Court in the judgment in the case of Commissioner of Income-tax v. Walfort Share and Stock Brokers (P) Ltd. [2010] 326 ITR 1' .... The mandate of s.14A is clear. It desires to curb the practice to claim deduction of expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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