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Income Tax Appellate Tribunal, MUMBAI BENCH “ B”, MUMBAI
Before: SHRI G.S.PANNU & SHRI VIKAS AWASTHY
ORDER PER VIKAS AWASTHY, J.M: This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-47, Mumbai [in short ‘the CIT(A)] dated 11/03/2020 for the assessment year 2017-18. The solitary issue raised by the Revenue in appeal is against deleting of disallowance u/s. 14A of the Income Tax Act, 1961 ( in short ‘ the Act’) by the CIT(A).
Shri Mahesh Akhade, representing the Department submitted that in assessment proceedings the Assessing Officer had computed disallowance of Rs.11,11,84,920/- under section 14A r.w.r. 8D(2) of the Act. In the first appellate proceedings, the CIT(A) deleted the aforesaid disallowance in entirety.
Shri Kapil Bohra appearing on behalf of the assessee submitted that during the period relevant to the assessment year under appeal the assessee has not earned any exempt income, hence, the CIT(A) following the decision rendered by Hon'ble Bombay High Court in various cases deleted the disallowance made by the Assessing Officer under section 14A of the Act.
Both sides heard. The solitary issue in the present appeal is deleting of disallowance under section 14A of the Act. During the period relevant to the assessment year under appeal the assessee has not earned any exempt income. It is no more res-integra that where no exempt income is earned no disallowance under section 14A of the Act is to be made. The Hon'ble Jurisdictional High Court in the case of CIT vs. Delight Enterprises in Income Tax Appeal No.110 of 2009 decided on 26/02/2009 has held that in the absence of exempt income no disallowance under section 14A of the Act could be made. Similar view has been expressed by the Hon'ble Bombay High Court in the case of PCIT vs. Red Chillies Entertainment Pvt. Ltd., 116 taxamann.com 770. The Hon'ble Supreme Court of India in the case of PCIT vs. Oil Industry Development Board, 262 Taxman 102 and PCIT vs. Cheminvest Ltd. has dismissed the SLP of Revenue against the Hon’ble Delhi High Court order holding that in absence of any exempt income, no disallowance under section 14A is permissible. In view of the settled legal position and undisputed facts, we find no infirmity in the impugned order, hence, the same is upheld and the appeal of Revenue is dismissed being devoid of any merit.
In the result, appeal by the Revenue is dismissed. Order pronounced in the open court on Friday the 17th day of December, 2021.