ACIT, CHENNAI v. M.Baskaran, CHENNAI

ITA 1717/CHNY/2013 | 2009-2010
Pronouncement Date: 31-07-2014 | Result: Dismissed

Appeal Details

RSA Number 171721714 RSA 2013
Assessee PAN AAFPB8375E
Bench Chennai
Appeal Number ITA 1717/CHNY/2013
Duration Of Justice 10 month(s) 24 day(s)
Appellant ACIT, CHENNAI
Respondent M.Baskaran, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-07-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Date Of Final Hearing 20-06-2014
Next Hearing Date 20-06-2014
Assessment Year 2009-2010
Appeal Filed On 06-09-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B B ENCH CHENNAI . ' $ % & ' BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD JUDICIAL MEMBER ./I.T.A.NO. 1717/MDS/2013 ( / ASSESSMENT YEAR: 2009-10) ASSISTANT COMMISSIONER OF INCOME TAX COMPANY CIRCLE-I(2) CHENNAI-34. VS MR. M.BASKARAN 11/5 VALLIAMMAL STREET ALAGAPPA NAGAR KILPAUK CHENNAI-600 010. PAN: AAFPB8375E ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. PRAMOD NANGIA CIT /RESPONDENT BY : MR. M.KARUNAGARAN ADVOCATE / DATE OF HEARING : 20 TH JUNE 2014 /DATE OF PRONOUNCEMENT : 31 ST JULY 2014 / O R D E R PER CHALLA NAGENDRA PRASAD JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI CHENNA I DATED 22.02.013 FOR THE ASSESSMENT YEAR 2009-10. TH E ONLY GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELET ING DISALLOWANCE MADE UNDER SECTION 14A READ WITH RULE 8D HOLDING THAT ASSESSEE HAS NOT RECEIVED ANY EXEMPT I NCOME AND HENCE DISALLOWANCE IS UNWARRANTED. 2 ITA NO. 1717/MDS/2013 2. THE ASSESSING OFFICER WHILE COMPLETING THE ASSES SMENT DISALLOWED ` 19 28 666/- UNDER SECTION 14A READ WITH RULE 8D OF THE ACT AS EXPENDITURE INCURRED FOR EARNING E XEMPT INCOME AS THE ASSESSEE WAS HOLDING INVESTMENTS WORT H ` 14.05 CRORES AND INCURRED INTEREST EXPENSES OF ` 34.80 LAKHS. ON APPEAL THE COMMISSIONER OF INCOME TAX (AP PEALS) DELETED THE DISALLOWANCE HOLDING THAT ASSESSEE HAS NOT DERIVED INCOME OUT OF INVESTMENTS AND INVESTMENTS A RE MADE FROM HIS OWN SOURCE WHICH DID NOT SUFFER ANY INTERE ST. THE COMMISSIONER OF INCOME TAX (APPEALS) ALSO OBSERVED THAT ASSESSING OFFICER SHOULD HAVE EXCLUDED SHARE APPLIC ATION MONEY FROM THE WORKING OF THE QUALIFYING AMOUNT. TH EREFORE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE RATIO OF THE DECISION IN THE CASE OF HERO CYCLES LTD. (320 I TR 518) DELETED THE DISALLOWANCE MADE UNDER SECTION 14A OF THE ACT. 3. DEPARTMENTAL REPRESENTATIVE RELYING ON THE DECI SION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF CH EMINVEST LTD.. VS. ITO (121 ITD 318) SUBMITS THAT EVEN IF TH E ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME STILL DISALLOWANC E UNDER 3 ITA NO. 1717/MDS/2013 SECTION 14A READ WITH RULE 8D HAS TO BE MADE AND I T IS MANDATORY. DEPARTMENTAL REPRESENTATIVE ALSO PLACES RELIANCE ON CIRCULAR NO.5/2014 DATED 11.2.2014 ISSU ED BY CBDT AND SUBMITS THAT EVEN IN THE CASE OF THE ASSE SSEE NOT RECEIVING ANY EXEMPT INCOME DURING THE FINANCIAL YE AR STILL THE DISALLOWANCE UNDER SECTION 14A HAS TO BE MADE. 4. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE HAS NOT RECEIVED ANY EXEMPT INCOME AND IN THE ABSENCE O F THE ASSESSEE RECEIVING ANY EXEMPT INCOME THERE IS NO JUSTIFICATION IN DERIVING EXPENSES ATTRIBUTABLE FOR EARNING INCOME WHICH IS NOT RECEIVED BY THE ASSESSEE. HE PL ACES RELIANCE ON THE RECENT DECISION OF THE HONBLE ALL AHABAD HIGH COURT IN THE CASE OF CIT VS. M/S. SIVAM MOTORS PVT.LTD. IN I.T. APPEAL NO.88 OF 2014 DATED 5.5.2014 FOR THE ASSESSMENT YEAR 2008-09 THE DECISION OF THE HONBL E GUJARAT HIGH COURT IN THE CASE OF CIT VS. CORRTECH ENERGY PVT. LTD. IN TAX APPEAL NO.239 OF 2014 DATED 24.3. 2014 FOR THE ASSESSMENT YEAR 2009-10 AND THE DECISION OF HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. DELITE ENT ERPRISES 4 ITA NO. 1717/MDS/2013 IN TAX APPEAL NO.110 OF 2009 DATED 26.2.2009. COUN SEL FOR THE ASSESSEE SUBMITS THAT EVEN OTHERWISE THE ASSES SING OFFICER SHOULD HAVE EXCLUDED SHARE APPLICATION MONE Y IN VARIOUS COMPANIES WHICH WILL NOT PRODUCE ANY EXEMPT INCOME. HE SUBMITS THAT IF SUCH SHARE APPLICATION M ONEY IS EXCLUDED THE DISALLOWANCE UNDER SECTION 14A OF THE ACT WILL WORKS OUT TO ` 5 61 125/- AS AGAINST DISALLOWANCE OF ` 19 28 666/- MADE BY THE ASSESSING OFFICER. FOR THE PROPOSITION THAT SHARE APPLICATION MONEY IS NOT INV ESTMENT FOR THE PURPOSE OF SECTION 14A HE PLACES RELIANCE ON T HE DECISION OF THE TRIBUNAL IN THE CASE OF RAINY INVES TMENTS PVT. LTD. VS. ACIT IN I.T. APPEAL NO.5491/MUM/2011 DAT ED 16.1.2013. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND SUBMISSIONS MADE BY THE ASSESSEE AND THE DECISI ONS IN RELIED ON. NO DOUBT IN THE DECISION OF THE SPECIAL BENCH OF DELHI TRIBUNAL IN THE CASE OF CHEMINVEST LTD. VS. I TO (SUPRA) THE SPECIAL BENCH HELD THAT DISALLOWANCE UNDER SECT ION 14A CAN BE MADE EVEN IN THE YEAR IN WHICH NO EXEMPT INC OME 5 ITA NO. 1717/MDS/2013 HAS BEEN EARNED OR RECEIVED BY THE ASSESSEE. THIS DECISION OF SPECIAL BENCH OF THE TRIBUNAL HAS BEEN IMPLIEDLY OVERRULED BY THE DECISIONS OF HIGH COURTS IN THE FOLLOWING CA SES: 6. IN THE CASE OF M/S. SHIVAM MOTORS P.LTD. (SUPRA ) BEFORE THE HONBLE ALLAHABAD HIGH COURT THE REVENU E RAISED THE FOLLOWING QUESTION OF LAW:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE INCOME TAX APPELLATE TRIBUNAL WAS JUSTIFIED IN UPHOLDING THE DECISION OF CIT(A) IN DELETING THE DISALLOWANCE OF ` 2 03 752/- U/S.14A IGNORING THE FACT THAT THERE IS DIFFERENCE OF OPINION OF VARIOUS COURTS ON THE VIEW TAKEN BY THE ITAT THAT IN THE ABSENCE OF TAX FREE INCOME NO DISALLOWANCE U/S.14A IS PERMISSIBLE. 7. THE HIGH COURT WHILE ANSWERING THE SAID QUESTION HELD AS UNDER:- AS REGARDS THE SECOND QUESTION SECTION 14A OF THE ACT PROVIDES THAT FOR THE PURPOSES OF COMPUTING THE TOTAL INCOME UNDER THE CHAPTER NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY TH E ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. HENCE WHAT SECTION 14A PROVIDES IS THAT IF THERE IS ANY INCOME WHICH DOES NOT FORM PART OF THE INCOME UNDER THE ACT THE EXPENDITURE WHICH IS INCURRED FOR EARNING THE INCOME IS NOT AN ALLOWABLE DEDUCTION. FOR THE YEAR IN 6 ITA NO. 1717/MDS/2013 QUESTION THE FINDING OF FACT IS THAT THE ASSESSEE HAD NOT EARNED ANY TAX FREE INCOME. HENCE IN THE ABSENCE OF ANY TAX FREE INCOME THE CORRESPONDING EXPENDITURE COULD NOT BE WORKED OUT FOR DISALLOWANCE. THE VIEW OF THE CIT(A) WHICH HAS BEEN AFFIRMED BY THE TRIBUNAL HENCE DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. HENCE THE DELETION OF THE DISALLOWANCE OF RS.2 03 752/- MADE BY THE ASSESSING OFFICER WAS IN ORDER. 8. THE GUJARAT HIGH COURT IN THE CASE OF CIT VS. C ORRTECH ENERGY PVT.LTD.(SUPRA) HELD AS UNDER:- WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE F ACTS AND THE DECISION RELIED UPON BY THE ID AR. THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS . WINSOME TEXTILE INDUSTRIES LTD . REPORTED AT (2009) 3191TR 204(P&H) HAS HELD THAT IN THE PRESENT CASE ADMITTEDLY THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION . IN SUCH A SITUATION SECTION 14A COULD HAVE NO APPLICATION. I N THIS CASE ALSO THE ASSESSEE HAS NOT CLAIMED ANY EXEMPT INCOME IN THIS YEAR . THEREFORE RESPECTFULLY FOLLOWING THE JUDGEMENT OF HON ' BLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT VS. WINSOME TEXTILE INDUSTRIES LTD. (SUPRA) WE HEREBY ALLOW THIS GROUND AND DIRECT THE AO TO DE LETE THE ADDITION . THEREFORE GROUND NOS 1 TO 1 . 2 RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION ARE ALLOWED .' 4. COUNSEL FOR THE REVENUE SUBMITTED THAT THE ASSES SING OFFICER AS WELL AS CIT(APPEALS) HAD APP L IED FORMULA OF RULE 80 OF THE INCOME TAX RULES SINCE THIS CASE AROSE AFTER THE ASSESSMENT YEAR 20092010 . SINCE IN THE PRESENT CASE WE ARE CONCERNED WITH THE ASSESSMENT YEAR 20092010 SUCH FORMULA WAS CORRECTLY APPLIED BY THE REVENUE. WE 7 ITA NO. 1717/MDS/2013 HOWEVER NOTICE THAT SUBSECTION (1) OF SECTION 14A PROVIDES T HAT FOR THE PURPOSE OF COMPUTING TOTAL INCOME UNDER CHAPTER IV OF THE ACT NO DEDUCTION SHALL BE ALLOWED I N RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE I N RELAT I ON TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT . IN THE PRESENT CASE THE TRIBUNAL HAS RECORDED THE FINDING OF FACT THAT THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION OF ANY INCOME FROM PAYMENT OF TAX . IT WAS ON THIS BASIS THAT THE TRIBUNA L HELD THAT DISALLOWANCE UNDER SECTION 14A OF THE ACT COULD NOT BE MADE . IN THE PROCESS TRIBUNAL RELIED ON THE DECISION OF DIVISION BENCH OF PUNJAB AND HARYANA HI GH COURT IN CASE OF COMMISSIONER OF INCOME TAX V WINSO ME TEXTILE INDUSTRIES LTD REPORTED IN (2009) 319 ITR 2 04 (PUNJ & HAR) IN WHICH ALSO THE COURT HAD OBSERVED AS UNDE R : ' 7 . WE DO NOT FIND ANY MERIT IN THIS SUBMISSION . THE JUDGEMENT OF THIS COURT IN ABHISHEK INDUSTRIES LTD (2006) 286 ITR 1 WAS ON THE ISSUE OF ALLOWABILITY O F INTEREST PAID ON LOANS GIVEN TO SISTER CONCERNS WI THOUT INTEREST . IT WAS HELD THAT DEDUCTION FOR INTEREST WAS PERMISSIBLE WHEN LOAN WAS TAKEN FOR BUSINESS PURPOS E AND NOT FOR DIVERTING THE SAME TO SISTER CONCERN WI THOUT HAVING NEXUS WITH THE BUSINESS. THE OBSERVATIONS MADE THEREIN HAVE TO BE READ IN THAT CONTEXT . IN THE PRESENT CASE ADMITTEDLY THE ASSESSE DID NOT MAKE A NY CLAIM FOR EXEMPTION. IN SUCH A SITUATION SECTION 1 4A COULD HAVE NO APPLICATION . ' 5 . WE DO NOT FIND ANY QUESTION OF LAW ARISING TAX APP EAL IS THEREFORE DISMISSED . 9. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS.DELITE ENTERPRISES(SUPRA) HELD AS UNDER:- THE REVENUE IS IN APPEAL ON THE FOLLOWING QUESTION S:- ' WHETHE R O N THE FAC T S A ND IN THE CI R C U MSTA N C E O F TH E CAS E A N D IN L AW TH E HON ' B L E T R I BUN A L WAS R IG H T IN D E L E T I NG THE D ISA LLOW A NCE MADE B Y THE ASSESSIN G OFFICER 8 ITA NO. 1717/MDS/2013 OF INTERE S T PA I D B Y T HE ASS E S SEE COMPAN Y ON B OR R OWE D FUNDS A MOUNTING TO RS.241 . 10 LAKHS OVERLOOKING T HE F AC T THAT THE BORRO W ED F U NDS W ERE USED B Y T HE A S S ESSE E CO MP ANY TO IN V EST IN THE CAPITAL OF A NOTHER PARTNER S HIP FIRM AND SINCE PROFIT S D ERI V E D B Y THE ASSE S SE E COMPAN Y F ROM A PARTNERSHIP FIRM WERE EXEMPT FROM TA X U / S.10 ( 2A ) OF THE INCOME-TAX ACT TH E INTERE S T EX P E NSE REL A TED T O SU C H TAX F R E E PROFITS IS TO BE DISALLOWED U / S.14A OF T HE INCOME TAX ACT ? ( B ) W HE T H E R ON T HE FACTS AND IN THE C IRCUMSTANCE OF THE CASE AND IN L AW THE HON ' BLE TRIBUN A L W A S RI G H T I N HOLD I N G THAT THE ASSESSING OFFICER CANNOT CONSIDER NOTIONAL INTERE ST ON DEPOSIT RECEIVED B Y THE ASSES SEE COMPAN Y W HILE ARRIVING AT THE FAIR MARKET V ALUE U / S.23(1 ) (A ) OF THE IN COME -TA X ACT ?' 2. IN SO FA R A S QUESTION ( A ) IS C ONCERNED ON F A C T S W E FIND THAT THE RE I S NO PROFIT FOR T HE RELE V AN T A S SESSM EN T YEAR . HENCE T HE QUESTION AS FRAMED W OULD NO T ARISE. 10. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBE PUNJA B & HARYANA HIGH COURT IN THE CASE OF CIT VS. M/S. LAK HANI MARKETING INCL. IN ITA NO.970 OF 2008 DATED 2.4.201 4. THE HONBLE HIGH COURT WHILE AFFIRMING THE DECISIONS O F CIT(A) AS WELL AS THE TRIBUNAL IN DELETING THE DISALLOWANCE M ADE UNDER SECTION 14A OBSERVED AS UNDER:- 7. AFTER HEARING LEARNED COUNSEL FOR THE PARTIES WE DO NOT FIND ANY MERIT IN THE APPEALS. 8. THE PRIMARY ISSUE THAT ARISES FOR CONSIDERATION IN THESE APEPALS IS WHETHER THE CIT(A) AS WELL AS THE TRIBUNAL WERE RIGHT IN ALLOWING DEDUCTION OF INTEREST LIABIL ITY OUT OF OTHER INCOME AND THE CLAIM OF THE REVENUE TO DISALL OW THE SAME UNDER SECTION 14A OF THE ACT WAS JUSTIFIED. 9 ITA NO. 1717/MDS/2013 9. THE CIT(A) VIDE ORDER DATED 24.6.2004 ANNEXURE A .II RECO RD E D AS UN DE R : - ' 7 . 2 KE EPIN G IN VIE W TH E AB OVE FA CT S A ND CIR C UM S TANCE S OF TH E CASE IT I S H EL D THA T T H E A O WAS NOT CORRECT IN A PPL Y IN G SECT I O N 14 A OF TH E I T A CT IN DISALLOW I NG TH E EX PENDITUR E O N A CCOUNT O F I NT E R ES T AMOUNTING TO ` 4 6 9 1 68 4 / - . IT WAS I NCUMB E NT O N THE AO T O E S TABLI S H A N EXUS B ETWEE N TH E EX P E NDITUR E I N C URRED AN D TH E INCOM E W HICH WAS EXE MPT UNDER TH E AC T . F ACT S CLEARLY D O NO T S UPP O RT TH E A CTION OF TH E AO . DISALL OW ANCE I S A C CO RDIN G L Y D E L E TED. T H E AO IS DIR E CT E D T O R E COMPUT E TH E I N CO M E AC C O R D IN G L Y .' 10 . VI D E O RD E R DA T E D 1 6.5.200 8 A NN EX UR E A . III T H E T RIBUN A L O N AP P EAL B Y T H E REVE NU E W HIL E UPH O LDIN G THE FI NDIN G R EC ORDED B Y T H E C IT (A) NOTICE D AS UNDE R : - ' W E H AVE H EA RD RI VA L S UBMI SS I O N S A ND HAVE PERU S ED T H E MA TE RI A L O N R E CORD . FRO M TH E R E ADIN G OF S EC TI ON 14 A OF THE ACT IT IS C LE A R TH A T B E FORE MAKIN G ANY DISA LLOW A NC E THE FOLLOWIN G CONDITION S A R E TO EX I S T : - A) THAT THER E MU S T B E INCOM E T AX ABLE UNDER THE ACT AND B) T HAT THI S INCOME MU S T NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT AND C) THAT THERE MUST BE AN EXPENDITURE INCURRED BY THE ASS E SS E E AND D) THAT THE E X PENDITUR E MU ST H AVE A RELATION TO THE INCOME WHICH DOE S NOT FORM PART OF THE TOTAL I NCOME UNDER TH E ACT. 9. THEREFORE UNLESS AND UNTIL THERE I S RECEIPT OF EXEMPT E D INCOME FOR THE CONCERNED A SS E SS M E NT Y EAR S ( DI V IDEND FROM SHARES ) W E ARE OF THE V IE W S EC TION 14A O F THE A C T CANNOT BE INVOKED . IN THI S APPEAL THE RE V ENUE HA S NOT DI S PEL L ED THE FINDINGS O F THE CIT(A ) NOR TH E S TAT E MENT O F THE AS S E SS EE BEFORE AO TH A T ASSE S SEE IS NOT IN RECEIPT O F AN Y DIVIDEND INCOME AND HENCE ACCORDIN G TO U S THE A S S E S SIN G OFFICER HAS ER R ED IN INVOK I NG SECTION 14A OF THE 10 ITA NO. 1717/MDS/2013 ACT TO DI S ALLOW VARIOU S INTER ES T PAYMENTS ON CAPITAL ACCOUNT SECURITY DEPO S ITS AND UNSECUR E D LOAN S. TH IS C ON C LUSION OF O UR S FIND S S UPPORT I N TH E DECISION OF BOMB A Y BENCH O F T H E TR I B UN A L IN THE CA S E OF JOINT COM M ISSIONER OF I NCOME TAX V. HOL L A N D EQ UIP M E N T CO . B.V. REPORTED IN (2005) 3 SOT 810 (MUMBAI) AND THE RE L EVANT PORTION OF THE ORDER OF THE B OMB AY BENCH OF THE TRIBU N AL IS REPRODUCED B E LO W: - ' REG A RD I N G APPL ICA TION OF SEC T I ON 14A OF T H E A C T TH E CONTENTION OF THE L E ARNED DEP A RTMENT REPRESENTATIVE H AS TO BE REJECTED ON THE FACE OF IT INASMUCH A S THE ENTIR E INCOME O F THE A SS ES S EE I S TA X ABL E UNDER THE ACT . SECTION 14A I S APPLICABLE ONL Y W H E N A N Y P A RT OF THE IN C OME IS NOT TO BE INCLUDED IN THE TOT A L INCOM E O F THE ASS E SS EE A ND THE EXPENDITU R E RELATING T O THAT PART O F INCOME I S CLAIM E D B Y THE A S S ESSEE A S DEDUCTI O N . IN S UCH CASE S ONL Y T H E E X PENDITURE RELATIN G T O T HE E X EMPTED INCOME CAN BE DISALLO W ED AND NOT OTHER W I S E . S I NCE IN THE PRESENT CASE THE ENTIRE INCOME IS FOUND TO BE TAXABLE NO DISALLOWANCE CAN BE MADE UNDER SECTION 14A OF THE ACT . ' 10. MOREOVER THE AO HAS NOT ESTABLISHED THE NEXUS BETWEEN INVESTED FUNDS AND THE INTEREST BEARING FUN DS S INCE THE INVE S TMENTS IN SHARES ARE IN THE YEARS 1995-96 1998-99 AND 1999-2000 AND THE INTEREST DISALLOWANCE IS FOR THE ASSES S MENT YEARS 2000-01 AND 2001 -02 . ON THE CONTRARY PERU S AL OF THE BALANCE S HEET FOR THE YEAR ENDING 31.3.1995 31.3.1998 AND 31.3.1999 IT IS CLEAR THAT INTEREST BEARING FUNDS HAVE NOT BEEN UTILIZED FOR INVESTMENT FOR PURCHASE OF SHARES . 11. F OR THE AFORESAID REASONS WE SEE NO REASON TO INTERFERE WITH THE ORDER OF CLT(A) CONCERNING ASSES SMENT Y EAR 2000-01 AND 2001-02 AND HENCE THE DECISION OF C IT (A) IN DELETING THE DISALLOWANCE OF INTEREST BY I NVOKING SECTION 14A OF THE ACT IS CORRECT AND IN ACCORDANCE WITH LAW .' 11. IN VIEW OF THE AFORESAID FINDINGS WHICH COULD NOT BE SHOWN TO BE ERRONEOUS THE PLEA OF THE REVENUE CANNOT BE ACCEPTED. 11 ITA NO. 1717/MDS/2013 11. IN THE CASE OF CIT VS. WINSOME TEXTILES INDUSTR IES LTD. (319 ITR 204) THE HONBLE PUNJAB & HARYANA HIGH COU RT HELD THAT WHEN THERE IS NO CLAIM FOR EXEMPTION OF INCOME IN SUCH SITUATION SECTION 14A HAS NO APPLICATION. RESPECTFU LLY FOLLOWING THE ABOVE DECISIONS WE DELETE THE DISALL OWANCE MADE UNDER SECTION 14A AS THE ASSESSEE HAS NOT EARN ED / RECEIVED FOR EXEMPT INCOME DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THUS WE SUSTA IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) O N THIS ISSUE. 12. IN THE RESULT APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY T HE 31 ST DAY OF JULY 2014 AT CHENNAI. SD/- SD/- ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDR A PRASAD ) . ( ' )* ) ACCOUNTANT MEMBER / JUDICIAL MEMBER/ ) ) /CHENNAI - /DATED 31 ST JULY 2014 SOMU /0 10 /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. 2 () /CIT(A) 4. 2 /CIT 5. 0 6 /DR 6. /GF .