MILAN DAIRY FOODS (P) LTD.,NEW DELHI vs. ACIT, CIRCLE- 5(1), NEW DELHI

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ITA 4431/DEL/2018Status: DisposedITAT Delhi27 January 2020AY 2008-092 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that if an assessee has not earned any exempt income during the relevant year, no disallowance can be made under Section 14A of the Income Tax Act. Therefore, the disallowance made by the AO and sustained by the CIT(A) was quashed.

What were the facts?

The assessee company filed its return of income, and the Assessing Officer (AO) made an addition under Section 14A. The CIT(A) confirmed this addition, leading to the present appeal before the ITAT.

What were the issues?

Whether disallowance under Section 14A is permissible when the assessee has not earned any exempt income during the assessment year.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “B +SMC”: NEW DELHI

Before: SHRI SUDHANSHU SRIVASTAVA & SHRI PRASHANT MAHARISHI

For Appellant: Shri V. Raja Kumar, Adv
For Respondent: Shri Umesh Takyar, Sr. DR
Hearing: 31/10/2019Pronounced: 27/01/2020

O R D E R PER PRASHANT MAHARISHI, A. M.

1.

This appeal is filed by the assessee against provision of section 14A applied. The registry noted that the appeal of the assessee is delayed 884 days. The reasons given by the assessee in the application that the company general manager retired from the service of the company and the now incumbent did not get linked with the pending task and therefore appeal could not be filed. The appeal was filed when counsel at the time of penalty proceedings informed the assessee. As nobody is benefitted by delaying filing of appeal and the reasons shown by the assessee is also supported that employee details of retired employee, we condone the delay.

2.

The order of the ld CIT(A)-19, New Delhi dated 30.10.2015 for the Assessment Year 2008-09.

3.

The assessee has raised the following grounds of appeal:- “1. On the facts and in the circumstances of the case and in law, the ld CIT(A) erred in confirming the addition made by the Assessing Officer by invoking the provision of Section 14A of the Income Tax Act, 1961 even though there was no exempt income earned during the relevant year. The action being arbitrary, erroneous and unlawful must be quashed with directions for appropriate relief.”

4. Assessee filed his return of income of Rs. 2879610/- wherein, the addition of Rs. 217272/- was made u/s 14A of the Act. The assessee preferred Page | 1

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