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TMI Blog2023 (7) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... ing amount of expenditure in relation to income not includible in total income. In view of the judgment of Maxopp Investment Ltd [ 2018 (3) TMI 805 - SUPREME COURT] we hereby quash and set aside the order impugned passed by ITAT and direct the AO to give effect to this order passed by us. . - INCOME TAX APPEAL NO. 344 OF 2018 - - - Dated:- 28-6-2023 - K.R. SHRIRAM, AND FIRDOSH P. POONIWALLA, JJ. For the Appellant : Mr. Akhileshwar Sharma a/w Ms. Shilpa Goel. For the Respondent : None. P.C. 1. The Principal Commissioner of Income Tax, Central-1, Mumbai ( PCIT ) has filed this appeal aggrieved by an order dated 20/02/2017 passed by the Income Tax Appellate Tribunal ( ITAT ) dismissing the appeal of the Revenue. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artner. The CIT(A) has taken a view that the investments made by company are in the form of strategic investments and directed the AO to compute the disallowance at 5% of the fixed/semi variable expenditure incurred by respondent and there was nothing wrong in the view expressed by CIT(A). 4. Respondent though served, as is evident from affidavit of service of Mr. Vijay Kumbhar affirmed on 26/11/2021, has not entered appearance. 5. Following substantial questions of law are proposed: (a) Whether on the facts and in the circumstances of the case and in law the Hon ble ITAT was justified in confirming the computation of disallowance of expenditure u/s. 14A adopted by the CIT(A) without appreciating that the disallowance u/s. 14A was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 14A adopted by the CIT(A)? 6. The Apex Court in Maxopp Investment Ltd. Vs. Commissioner of Income Tax (2018) 402 ITR 640 (SC) relied upon by Mr. Sharma has held that as per Section 14A inserted by Finance (Amendment) Act, 2001, if expenditure is incurred on earning the dividend income, that much of the expenditure which is attributable to the dividend income has to be disallowed and cannot be treated as business expenditure. The Apex Court held that as per Section 14A(1) of the Act, deduction of that expenditure is not to be allowed which has been incurred by assessee in relation to income which does not form part of the total income under this Act . Axiomatically, it is that expenditure alone which has been incurred in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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