REMARKABLE CONSUMER ELECTRONICS PRIVATE LIMITED,NEW DELHI vs. PR.CIT-7, NEW DELHI

The solitary grievance of the assessee is that the CIT(A) / NFAC erred in confirming the disallowance of Rs.59,392/-made by the AO u/s. 14A of the Act.

Briefly stated the facts of the case are that during the course of the scrutiny assessment proceedings the AO noticed that the assessee has shown total investments of Rs. 64.74 crores in its balance sheet. The AO further found that the assessee has claimed expenses to the extent of Rs.59,392/-.

Invoking the provisions of section 14A r.w. rule 8D the AO asked the assessee to show cause why disallowance u/s. 14A should not be made. On receiving no plausible reply the AO computed the disallowance and made addition of Rs.59,392/-.

This issue is no more resintera and has been decided by the Hon’ble High Court of Delhi in the case of Era Infrastructure India Limited in vide order dated 20.07.2022 wherein Hon’ble High court had considered the decision of Hon’ble High Court in the case of IF & FS Energy Development Company Limited 2017 SCC Online Del 9893 wherein it has been held that no disallowance u/s. 14A of the Act can be made if the assessee had not earned any exempt income.

Considering the amendment brought in the statue by the Finance Act, 2022 the Hon’ble High Court held as under :-

In the light of the above the AO is directed to delete the impugned addition. The appeal of the assessee is allowed.

Decision announced in the open court on 17.08.2022.