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TMI Blog2023 (10) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee alone. It is not a case where only by chance the shares would be in the hands of the assessee when such a dividend is declared. If the assessee holds these shares as stock-in-trade, to be liquidated whenever the share price goes up in order to earn profits, then it would be possible that during such holding, the investee company may declare dividend. Purpose of assessee holding the shares is not to liquidate when the share price goes up and thereby to earn profit, but the assessee holds such shares in the group companies to meet the business requirements of such companies. Assessee is bound to receive the dividend when it is declared. Therefore, the decision of Maxopp Investment Ltd [ 2018 (3) TMI 805 - SUPREME COURT] as followe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vate Limited ( the assessee ) for the assessment year 2018-19, Revenue preferred this appeal. 2. Only issue involved in this case is whether any disallowance under section 14A of the Income Tax Act, 1961 (for short the Act ) read with rule 8D of the Income Tax Rules, 1962 (for short the Rules ) could be made if the assessee had not earned any exempt income during the year under consideration. 3. Brief facts of the case are that during the year under consideration, the assessee company is mainly engaged to carry on the business as a Non-Banking Finance Company (NBFC), providing loans, Inter-Corporate Deposits (ICD) and making investments primarily within group companies to meet their business requirements and the company s income com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended that the assessee invested in group companies and in terms of the decision of the Hon ble Apex Court in the case of Maxopp Investment Ltd vs. CIT (2018) 91 taxmann.com 154, when the assessee knows it well that the investment which it make in the group companies would yield dividend, the assessee would necessarily earn such dividend and therefore, it is not the quirk of weight that the assessee received the dividend declared by the investee company, during the period in which the assessee holds such shares. 7. The learned DR placed reliance on the decisions in Maxopp Investment Ltd (Supra) and the decision of the Hon ble Karnataka High Court in the case of CIT vs. Kingfisher Finvest India Ltd (2020) 121 taxmann.com 232 (K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany may declare dividend. 10. It is, therefore, clear that the purpose of assessee holding the shares is not to liquidate when the share price goes up and thereby to earn profit, but the assessee holds such shares in the group companies to meet the business requirements of such companies. Assessee is bound to receive the dividend when it is declared. Therefore, the decision of the Hon ble Supreme Court in the case of Maxopp Investment Ltd (Supra) as followed by the Hon ble Karnataka High Court in the case of Kingfisher Finvest India Ltd (Supra) is applicable to the facts of the case. 11. Argument of the learned Counsel that the issue is held in favour of the assessee in assessee s own case for earlier assessment years does not hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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