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TMI Blog2023 (1) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 2,33,07,231/- made by AO for A.Y 2017-18 on account of disallowance u/s 14A of the Income Tax Act, 1961, ignoring the fact that the asessee has not provided any quantitative details to prove that the accounts for taxable income and exempt income were separately maintained in respect of shares." 2. "Whether or not on the facts and in the circumstances of the case the Ld.CIT(A) is justified in ignoring the fact that the investment made by the assessee is capable of earning dividend income which is exempt from tax. The Ld.CIT(A) has not appreciated the fact that the intention of legislature is to disallow all the expenditures incurred in relation to income, which does not form part of total income. In the case of Lolly Motors India(p.)L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant CBDT circular No. 5 dated 11.02.2014 and judgment of Hon'ble Karnataka High Court in the case of PCIT vs. Karnataka State Financial Corporation (2022) 137 Taxmann.com 195. Therefore impugned first appellate order may kindly be set aside by restoring that of the AO. 4. Replying to the above the learned AR submitted that it is a peculiar fact of the case that in the present case the appellant had no exempt income in the relevant financial year pertaining to assessment year under consideration therefore no disallowance could have been made u/s. 14A of the Income Tax Act 1961, and Rule 8D of the Income Tax Rules 1963. In view of judgment of Hon'ble Delhi High Court in the case of Cheminvest Ltd. vs CIT in ITA 749/2014 dated 02.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In our humble view until unless the issue is adjudicated at the level of Hon'ble Supreme Court modifying of setting aside the orders of judgments of Hon'ble High Court all authorities below to the High Court's including this Tribunal is duty bound to follow the propositions rendered by Hon'ble High Court therefore we are inclined to hold that the Ld. CIT(A) was right in granting relief to the assessee by following the proposition rendered by various High Court's including judgment of Hon'ble Delhi High Court in the case of Cheminvest vs. CIT (supra). Consequently ground of revenue being devoid of merit is dismissed.
6. In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on 30.01.2023. X X X X Extracts X X X X X X X X Extracts X X X X
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