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Income Tax Appellate Tribunal, DELHI BENCH “C” NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI B.R.R. KUMAR
PER AMIT SHUKLA, J.M.: The aforesaid appeal has been filed by the assessee against the impugned order dated 11.10.2017 passed by Commissioner of Income Tax (Appeals)-XXXV, New Delhi for the quantum of assessment passed u/s.143(3) for the Assessment Year 2014-15. The only ground raised by the Revenue reads as under:
“1. Whether the CIT(A) was correct on facts and circumstances of the case and in law in deleting the addition made by the Assessing Officer on account of disallowance u/s.14A r.w.s. Rule 8D(2)(iii).”
The brief facts are that the Assessing Officer noticed that assessee had shown huge investment in equity shares under the head “current and non-current investments” as on 31.03.2013 and 31.03.2014. The Assessing Officer has categorically noted that assessee has not claimed any exempt income during the year. However, he firstly proceeded that this investments are capable yielding exempt income. Accordingly, he proceeded to make the disallowance u/s. 14A read with Rule 8D for sums amounting to Rs.3,77,96,196/-. Ld. CIT(A) by following the judgment of Hon’ble Delhi High Court in the case of Cheminvest Ltd. vs. CIT-IV, 61 Taxman.com 118 (Delhi) held that hence there is no exempt income, no disallowance u/s.14A can be made. In view of the admitted fact that assessee has not earned any exempt income, therefore, no disallowance u/s.14A can be triggered during the year in view of the law laid down by the Hon’ble Jurisdictional High Court in the case of Cheminvest Ltd. Vs. CIT (supra). Accordingly, we do not find any infirmity in the order of the CIT(A) and the same is confirmed.
In the result, the appeal of the Revenue is dismissed. Order pronounced in the Open Court on 14th January, 2021