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TMI Blog2021 (3) TMI 1435X X X X Extracts X X X X X X X X Extracts X X X X ..... 5/2014 that the disallowance u/s 14A are allowed even if no exempt income is earned. 2. On the facts and circumstances of the case the Ld.CIT(A) has erred in deleting disallowances of expenses of Rs. 1,89,45,379/- by not adjudicating entirely on merits on the cogent reasons brought on record by the AO in the assessment order justifying the disallowances. 3. On the facts and circumstances of the case the Ld.CIT(A) has erred in deleting disallowance made on account of depreciation on software licences @ 25% by relying on the order of his predecessor and without assigning any specific reasons. 4. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting disallowance made on account of depreciation on software licen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Rules is called for. 7. Reply of the assessee was considered but was not accepted by the Assessing Officer who was of the firm belief that for earning exempt income, certain expenses need to be disallowed as per provisions of sec. 14A of the Act r.w.r. 8D of the Rules. The Assessing Officer, accordingly, computed the disallowance at Rs. 20,84,878/-. 8. Proceeding further, the Assessing Officer noticed that the assessee has claimed expenses of Rs. 1,89,45,379/- out of total expenses claimed. 9. During the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has carried on the activity of sale of contents on behalf of BCCL from A.Ys 2001-02 to 2005-06. According to the Assessing Officer, under the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer. 15. Per contra, the ld. counsel for the assessee reiterated what has been stated before the lower authorities. 16. We have given thoughtful consideration to the orders of the authorities below. It is true that the assessee has earned dividend income which has been claimed as exempt. It is equally true that certain expenses need to be disallowed u/s 14A of the Act r.w.r. 8D of the Rules. There is no dispute that the assessee has received dividend income only from one company, namely, Times of Money Ltd. We are of the considered view that the Assessing Officer should have considered only those investments which yielded exempt income. We find that the directions of the ld. CIT(A) are in consonance with the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naged by the assessee company on behalf of its holding company, Benett Coleman and Co. Ltd till 30.09.2004. The holding company withdrew this right from the assessee company from 30.09.2004 and handed over this business to a new group company called Optimal Media solutions Ltd. After the termination of this line of business in the immediately preceding year, the assessee claimed not to have been engaged in rendering any services relating to Medianet Business. The assessee also furnished particulars of income earned by new company, M/s Optimal Media Solutions Lt., from the business. Similarly, regarding the sale of contents, the assessee submitted that this business hitherto entrusted to the assessee by its holding company was withdrawan w.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee was having these business from its holding company. Such businesses were withdrawn by the holding company from the assessee w.e.f 1.10.2004. The opinion of the AO that though there was no income to the assessee from these businesses, still it was incurring expenses for them, is unfounded. On a specific query, the Id. DR failed to draw our attention towards any specific expenditure incurred by the assessee qua these businesses withdrawn by the holding company. The AO made disallowance of Rs. 16.12 crore simply by means of a mathematical exercise carried out by him. If he found the expenditure incurred by the assessee to be on higher side, it was incumbent upon him to specifically point out as to which expenses were not incurred f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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