ITO, WARD- 10(4), NEW DELHI vs. GYANSAGAR BUILDTECH LTD., NEW DELHI

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ITA 7739/DEL/2017Status: DisposedITAT Delhi01 February 2021AY 2014-153 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that Section 14A of the Income Tax Act does not apply if no exempt income is received or receivable during the relevant previous year. Therefore, the deletion of the addition by the CIT(A) was upheld.

What were the facts?

The Assessing Officer made a disallowance under Section 14A of the Income Tax Act. The assessee argued that no exempt income was earned in the relevant assessment year. The CIT(A) deleted the addition based on this submission.

What were the issues?

Whether disallowance under Section 14A is permissible when no exempt income has been earned by the assessee.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, DELHI BENCHES “C” : DELHI

Before: SHRI BHAVNESH SAINI & SHRI B.R.R. KUMAR

Hearing: 18.01.2021Pronounced: 01.02.2021

This appeal by Revenue has been directed against the Order of the Ld. CIT(A)-4, New Delhi, Dated 17.10.2017, for the A.Y. 2015-2016, challenging the Order of the Ld. CIT(A) in deleting the addition of an amount of Rs.2,86,85,018/- under section 14A of the I.T. Act, 1961.

2 ITA.No.7739/Del./2017 M/s. Gyansagar Buildtech Ltd., New Delhi. 2. We have heard the Learned Representatives of both the parties through video conferencing and perused the material available on record.

3.

In this case, the A.O. made disallowance of the impugned amount under section 14A of the I.T Act, 1961. The assessee submitted before the Ld. CIT(A) that addition is wholly unjustified because the assessee has not earned any exempt income in assessment year under appeal. The assessee relied upon the Judgment of the Hon’ble Delhi High Court in the case of Chemnivest Ltd., vs., Commissioner of Income Tax 378 ITR 33 in which it was held that “Section 14A of the I.T. Act will not apply if no exempt income is received or receivable during the relevant previous year.” The Ld. CIT(A) following this decision of the Hon’ble Delhi High Court, deleted the addition.

4.

After considering the rival submissions, we are of the view that the issue is covered by the aforesaid Judgment of the Hon’ble Delhi High Court in the case of Chemnivest Ltd., (supra), therefore, Ld. CIT(A) rightly deleted the 3 ITA.No.7739/Del./2017 M/s. Gyansagar Buildtech Ltd., New Delhi. addition. The Departmental Appeals fails and is accordingly dismissed.

5.

In the result, appeal of the Revenue dismissed.

Order pronounced in the open Court.

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