ITO, NEW DELHI vs. M/S. ATHENA ENERGY VENTURES P.LTD.,, NEW DELHI

This appeal by the revenue is preferred against the order of the CIT(A) - 1, New Delhi dated 01.08.2018 pertaining to A.Y 2012-13.

The solitary grievance of the revenue is that the CIT(A) erred in deleting the addition of Rs. 3,55,46,083/- made by the Assessing Officer u/s 14A of the Income-tax Act, 1961 [hereinafter referred to as 'The Act']

Briefly stated, the facts of the case are that during the course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee has made investment in shares amounting to Rs. 789.02 lakhs.

The assessee challenged the addition before the ld. CIT(A) and vehemently contended that during the year, the assessee has not earned any exempt income. Therefore, no disallowance need be made u/s 14A of the Act.

The ld. CIT(A) was convinced with the contention of the assessee that the assessee has not earned any exempt income, therefore, no disallowance need be made u/s 14A of the Act.

Before us, the ld. DR strongly supported the findings of the Assessing Officer.

None appeared on behalf of the assessee. Therefore, we decided to proceed ex-parte.

We have given thoughtful consideration to the orders of the authorities below. There is no dispute that during the year the assessee did not earn any exempt income from tax. We find that the assessee has pointed out to the ld. CIT(A) that no exempt income is earned during the year under consideration. Since there is no exempt income earned during the year under consideration, no disallowance is to be made u/s 14A r.w.r 8D of the Act. This issue is by now well settled in favour of the assessee and against the revenue by the decision of the Special Bench of the Tribunal in the case of M/s Cheminvest Ltd 121 ITD 318 which was reversed by the Hon'ble High Court of Delh 61 Taxman.com 118. Same view is taken by the Hon'ble Gujarat High Court in the case of Corrtech Energy (P) Ltd 372 ITR 97.

In the result, the appeal of the Revenue in is dismissed.