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1 - 5 of 5 (0.38 seconds)Commissioner Of Income Tax vs M/S Lakhani Marketing Inc on 3 December, 2010
1.3.2. I find that recently the Punjab and Haryana High
Court in the case of CIT Vs. Lakhani Marketing (P&H
High Court) on June 5th, 2014 has held that from the
reading of s. 14A of the Act, it is clear that before
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making any disallowance the following conditions are to
exist:- a) That there must be income taxable under the
Act, and b) That this income must not form part of the
total income under the Act, and c) That there must be an
expenditure incurred by the assessee, and d) That the
expenditure must have a relation to the income which
does not form part of the total income under the Act.
Therefore, unless and until, there is receipt of exempted
income for the concerned assessment years (dividend
from shares), s. 14A of the Act cannot be invoked (Hero
Cycles 323 ITR 518 (P&H) and Winsome Textile 319
ITR 204 (P&H) followed).
Commissioner Of I.Tax vs M/S. Delite Properties Pvt. Ltd on 4 June, 2014
1.3.3 Further in the case of CIT Vs. Delite Enterprises,
the jurisdictional High Court on 25.06.2012 observed that
the assessee, a partner in a firm, borrowed funds and
advanced it to the firm on terms that the firm would pay
interest if it made a profit. For one year, the firm paid
interest which was offered as income by the assessee
while for the second year it did not pay interest as it
made a loss. The assesse claimed the interest paid on the
borrowings as a deduction u/s.36(1)(iii). The AO
disallowed the claim on the ground that as the
borrowings had been invested in the firm and the income
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A.Y. 2011-12
from the firm was exempt u/s.10(2A), the interest
expenditure was not allowable u/s.14A. This was
reversed by the CIT(A). On appeal, the Tribunal upheld
the CIT(A) on the ground that as there was no exemption
claimed u/s.10(2A) by the assessee and there was no tax
free income, s. 14A could not apply. The department
filed an appeal in the High Court in which it argued that
as the profits derived by the assessee from the firm was
exempt u/s.10(2A), the interest on the borrowed funds
used to invest in the firm was disallowable u/s.14A. The
Hon'ble Court held that while dismissing the appeal of
the revenue that in so far as Question (A) is concerned,
on facts we find that there is no (tax-free) profit for the
relevant assessment year. Hence the question as framed
would not arise.
Commissioner Of Income Tax, Hyderabad vs M/S. Motor And General Stores (P.) Ltd on 2 May, 1967
1.3.5 I find that in February 2008, the appellant had
acquired 100% ownership (10000 shares) of a company
M/s. Marino Shelters Pvt. Ltd., by investing an amount of
Rs.55,12,50,000/-. The investment was by way of
expansion of the appellant's business. There is no
question of selling or dealing in these share. The
investment was a strategic investment in 100% subsidiary
and there was no question of cost of maintaining the
portfolio or any other cost in the relevant year as
contemplated u/s.8D(2)(iii). Such cost has to be taken as
Nil. Without prejudice to this, a combined reading of the
cases as cited supra revealed that the law as laid down by
the Delhi Special Bench of Tribunal in the Cheminvest is
not a correct law, thus the appellant having no exempt
income in the year under consideration, no disallowance
can be made u/s.14A. The Ld. AO is thus directed to
delete the addition, these grounds of appeal are
accordingly allowed.
The Coinage Act, 2011
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