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Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: SHRI R.S. SYAL
आदेश / ORDER
PER R.S. SYAL, VP:
This appeal by the assessee arises out of the order dated 28-03-2023 passed by the CIT(A) in National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2014-15.
The only issue raised in this appeal is against the confirmation of disallowance of Rs.1,59,879/- made by the Assessing Officer (AO) u/s.14A of the Act.
Briefly stated, the facts of the case are that the AO recorded in para 5.3 of his order that the assessee earned exempt income. He,
Shah Govardhandas Bhikaridas (HUF) therefore, proceeded to compute the disallowance u/s.14A r.w.r 8D.
The ld. CIT(A) dismissed the assessee’s appeal after duly noting the assessee’s contention that no dividend was received during the year under consideration.
Having heard the rival submissions and gone through the relevant material on record, it is seen that the assessee specifically stated before the ld. CIT(A), as has been recorded on page 5 of the impugned order, that no dividend was received during the year. The Hon'ble Delhi High Court in Cheminvest Ltd. vs. CIT (2015) 378 ITR 33 (Del) has held that if there is no exempt income, there can be no question of making any disallowance u/s 14A of the Act. Similar view has been taken by the Hon'ble Delhi High Court in CIT vs. Holcim India P. Ltd. (2014) 90CCH 081-Del-HC.
It is seen that an amendment has been carried out to section 14A by the Finance Act, 2022 providing that the disallowance u/s 14A would be called for notwithstanding no receipt of exempt income during the year. The Hon’ble Delhi High Court in Pr.CIT Vs. Era Infrastructure (India) Ltd. (2022) 448 ITR 674 (Delhi) has held such amendment to be retrospective. In that view of the matter, the case pertaining to the A.Y. 2014-15 under consideration, having no exempt income during the year, would be governed by the ruling
Shah Govardhandas Bhikaridas (HUF) in Cheminvest (supra). Respectfully following the precedent, I order to delete the disallowance.
In the result, the appeal is allowed. Order pronounced in the Open Court on 09th June, 2023.