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TMI Blog2021 (4) TMI 964X X X X Extracts X X X X X X X X Extracts X X X X ..... TISH CHANDRA SHARMA J., 1. The present appeal is arising out of the order dated 27.11.2018 passed by the Income Tax Appellate Tribunal (ITAT) in I.T.A.No.2102/Bang/2018 in respect of the assessment year 2013-14. 2. The facts of the case reveal that the assessee is a company engaged in the business as property developers and filed its return of income for the assessment year 2013-14 showing income as nil. The case of the asseessee was selected for scrutiny in the year under consideration and assessment order was contemplated under Section 143(3) of the Income Tax Act, 1961 (for short, I.T.Act ), whereas the assessee s loss was determined at ₹ 6,00,36,601/- in view of disallowance of ₹ 6,11,21,496/- under Section 14A of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h tax was under dispute, and if subsequently such dispute is settled; and the assessee, within six months from the end of the month in which the dispute is settled, furnishes to the Assessing Officer evidence of settlement of dispute and evidence of payment of such tax along with an undertaking that no credit in respect of such amount has directly or indirectly been claimed or shall be claimed for any other assessment year, the Assessing Officer shall amend the order of assessment or any intimation or deemed intimation under subsection (1) of section 143, as the case may be, and the provisions of section 154 shall, so far as may be, apply thereto: Provided that the credit of tax which was under dispute shall be allowed for the year in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid Circular was not even relied by the parties. This court in CO MMISSIONER OF INCOME TAX VS. KINGFISHER INVESTMENT INDIA LTD. vide judgment dated 29.09.2020 inter alia held that disallowance under Section 14A read with Rule 8D has to be made even when taxpayer in a particular year has not earned any exempt income. This court relied on the decision of the Supreme Court in MAXOPP INVESTMENT LTD supra which was reproduced in Paragraph 5 of the decision and reliance was also placed on Circular dated 11.02.2014 issued by Central Board of Direct Taxes (CBDT). However, the aforesaid decision was subsequently considered by this court in judgment dated 16.01.2021 passed in I.T.A.No.271/2017 (PRINCIPAL COMMISSIONER OF INCOME TAX VS. NOVEL SO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to earn profits. The situation here is therefore, different from the case like Maxopp Investment Ltd. where the assessee would continue to hold those shares as it wants to retain control over the investee company. In that case, whenever dividend is declared by the investee company that would necessarily be earned by the assessee and the assessee alone. Therefore, even that the time of investing into those shares, the assessee knows that it may generate dividend income as well and as and when such dividend income is generated that would be earned by the assessee. In contrast, where the shares are held as stock-in-trade, this may not be necessarily a situation. The main purpose is to liquidate those shares whenever the share price goes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Therefore, the conclusion arrived at by us in M /S NOVEL SOFTWARE INDIA (P) LTD. is affirmed but for different reasons. It is also clarified by us that while recording the conclusion in KINGFISHER FINVEST LTD. that disallowance under Section 14A has to be made even taxpayer has not earned any exempt income, this court has misread the ratio of the decision of the Supreme Court in MAXOPP INVESTMENT LTD supra and therefore, the aforesaid view being contrary to the law laid down by the Supreme Court is not a binding precedent. 7. Keeping in the aforesaid judgment, as for the assessment year 2013-14, the assessee has not earned any exempted income. The aforesaid fact has not been disputed by the revenue, and therefore, the ITAT was just ..... X X X X Extracts X X X X X X X X Extracts X X X X
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