M/S NCG ENTERPRISES LTD.,LUDHIANA vs. ACIT, C-7, LUDHIANA

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ITA 613/CHANDI/2018Status: DisposedITAT Chandigarh11 January 2019AY 2014-152 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that if no tax-exempt income is earned, no disallowance under Section 14A can be made. The disallowance made by the lower authorities was ordered to be deleted.

What were the facts?

The assessee appealed against the disallowance of expenditure under Section 14A. The assessee contended that no tax-exempt income was earned during the assessment year.

What were the issues?

Whether disallowance under Section 14A is permissible when the assessee has not earned any tax-exempt income.

Which sections of the Income-tax Act were involved?

Section 14A

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आदेश/Order

Per Sanjay Garg, Judicial Member :

The present appeal has been preferred by the

assessee against the order dated 16.03.2018 of the

Commissioner of Income Tax (Appeals)-3, [hereinafter referred

to as CIT(A)],Ludhiana.

2.

The sole issue raised in this appeal is relating to

disallowance of expenditure incurred for earning of tax

exempt income under the provisions of Section 14A of the

Income Tax Act,1961. At the outset, ld. counsel for the

assessee has submitted that the assessee during the year

did not earn any tax exempt income. He, therefore, has

submitted that the issue is squarely covered by the

various decisions of the higher Courts including the

jurisdictional Hon'ble Punjab & Haryana High Court in the

ITA-613/CHD/2018 Page 2 of 2

case of CIT Faridabad v. Lakhani Marketing INC 226

Taxmann 45 (P&H) and also by the decision of Hon'ble

Delhi High Court in case of Cheminvest Ltd. Vs. CIT

(2015) 378 ITR 33 (Del) and further of the Hon'ble

Allahabad High Court in the case of CIT Vs. M/s Shivam

Motors (P) Ltd. (2014) 272 CTR 277 (All). In view of this,

the issue is squarely covered in favour of the assessee.

Hence, respectfully following the proposition of law laid

down by various High Courts, disallowance, if any, made

by the lower authorities in this case under the provisions

of Section 14A of the Act is ordered to be deleted.

3.

In the result, appeal of the assessee stands allowed.

Order Pronounced in the Open Court on 11.01.2019.

Sd/- Sd/- (अ�नपूणा� गु�ता) (संजय गग�) (ANNAPURNA GUPTA) (SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member “Poonam” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6.

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar

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