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TMI Blog2024 (5) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... ication from CBDT, the assessee seeks withdrawal of the TP grounds i.e, Adjustment on account of allocation of Royalty earned by Unilever. DR does not object to the withdrawal of TP ground, and, therefore, we allow the request of the assessee in the light of the MAP order dated 11.10.2023. Therefore, ground nos. 2 to 6 stands dismissed. Disallowance u/s 14A read with Rule 8D - limited plea of the assessee is that the disallowance be restricted to the extent of exempt income earned by assessee - HELD THAT:- Hon ble Bombay High Court in the case of M/s. Nirved Traders Pvt. Ltd. [ 2019 (4) TMI 1738 - BOMBAY HIGH COURT] held that the disallowance u/s 14A of the Act r.w.r. 8D of the Rules need not exceed assessee s exempt income - we direct the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and the adjustment on account of allocation of royalty be deleted. 6. Without prejudice to the above, erred in allocating gross royalty as against net royalty earned by Unilever Plc as was done in the previous year 09-10 relevant to AY 10-11. 4. Regarding the aforesaid grounds, the Ld. AR submits that pursuant to application filed in accordance with Rule 44G(6) of the Income Tax Rules, 1962 (hereinafter the Rules ), before the Competent Authority (CA) of India and the UK, for resolution of the aforesaid TP issue as per Mutual Agreement Procedure (MAP), the assessee received letter from CBDT dated 11.10.2023, intimating resolution of dispute under MAP with U.K for FY 2009-10 to FY 2013-14, and consequently, prays for withdrawal of aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of M/s. Nirved Traders Pvt. Ltd. Vs. DCIT (ITA. No.149 of 2017) vide order dated 23.04.2019 wherein the question of law framed was as under: - Whether ITAT was right in law in confirming the disallowance under Section 14A of the Income Tax Act, 1961 in excess of exempt income earned by the Assessee during the assessment year in question ? 8. And the Hon ble High Court took note of the decision of the Hon ble Delhi High Court in the case of Cheminvest Ltd. Vs. Commissioner of Income Tax (378 ITR 33) wherein it was held by Hon ble Delhi High Court that the disallowance u/s 14A of the Act read with Rule 8D of the Rules would not be permissible when the assessee has not earned any income which was exempt from tax. And the Hon ble H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and close nexus with the factually incurred expenses. It is not deemed disallowance under Section 14A of the act but an enabling provision for assessing authority to compute the same on the given facts and figures in the regularly maintained Books of Accounts. The assessing authority also could not have called upon the Assessee himself to undertake the exercise of computing the disallowance under Section 8D of the Rules. Such abdication of duty is not permissible in law. Since no such exercise has been undertaken by the assessing authority, the case calls for a remand. 9. Similar view was held by the Hon ble Gujarat High Court in the case of Commissioner of Income Tax-1 Vs. Corrtech Energy (P) Ltd. reported in (2015) 372 ITR 97 wherein Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same to sister concern without having nexus with the business. The observations made therein have to be read in that context. In the present case, admittedly the assessee did not make any claim for exemption. In such a situation section 14A could have no application. 5. We do not find any question of law arising. Appeal is therefore dismissed. 10. Similar view was taken by the Hon ble Bombay High Court in the case of PCIT-10 Vs. HSBC Invest Direct (India) Ltd wherein it was observed as under: - 4. Having heard learned Counsel for the parties and perused documents on record, we notice that in Cheminvest Ltd. (supra) Delhi High Court had referred to and relied upon its earlier decision in the case of CIT Vs. Holcim India (P) Ltd. (I.T.A. N ..... X X X X Extracts X X X X X X X X Extracts X X X X
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