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Income Tax Appellate Tribunal, DELHI BENCHES ‘D’, NEW DELHI
Before: Sh. BHAVNESH SAINIDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the Revenue against the order dated 24.05.2016 passed by the Ld. CIT(Appeals), Faridabad relating to AY 2012-13 on the following grounds of appeal: 1. “Whether on the facts and circumstances of the case the Ld. CIT(A) was right in law and on facts in deleting the addition of Rs. 2,48,16,539/- made on account of disallowance of interest on investment u/s 14A of the Income Tax Act read with Rule 8D(2)(ii) of the Income Tax Rules, 1962.”
2 Lakhani Rubber Udyog P. Ld. 2. Schedule 10 of the balance sheet of the assessee reflected the following investments:
Description Amount in Rs. As on Amount in Rs. As on 01.04.2011 31.03.2012 Investment in equity 4,77,571 4,77,571 shares of M/s Lakhani Footcare Pvt. Ltd. Investment in equity 3,58,179 3,58,179 shares of M/s Lakhani Detergents & Soaps P. Ltd. Investment in equity 2,38,785 2,38,785 shares of M/s Lakhani India Ltd. Investment 2,05,15,733 2,05,15,733 subscription in M/s Lakhani Vardaan Auto Pvt. Ltd. Investment 3,99,22,508 3,99,22,508 subscription in M/s Lakhani Hitech Rubber Pvt. Ltd. Investment 4,51,18,929 4,51,18,929 subscription in M/s Lakhani Auto Components Pvt. Ltd. Investment 5,05,06,299 5,05,06,299 subscription in M/s Lakhani Medicare Pvt. Ltd. Investment 19,16,236 19,16,236 subscription in M/s Lakhani Platinum Lifestyle Pvt. Ltd. Investment 7,04,29,938 7,04,29,938 subscription in M/s Lakhani Fashion (India) Pvt. Ltd. Total 22,94,84,178 22,94,84,178 3 Lakhani Rubber Udyog P. Ld.
The Assessing Officer held that the assessee has made capital investments with a view to earned dividends. The Assessing Officer further held that the assessee has not allocated any component of expenditure in relation to the investments made to be disallowed u/s 14A of the I.T. Act.
Before us during arguments, it is brought to our notice that the assessee has not earned any dividend income during the year which has been claimed as exempt. Ld. DR has not controverted this fact. Hence, relying on the judgment of Hon’ble Delhi High Court in the case Cheminvest Ltd. Vs CIT in dated 02.09.2015, wherein it was held that no disallowance is required to be made, wherein the assessee has not claimed any exempt income, we hereby direct that no disallowance u/s 14A is required to be made by the Assessing Officer.
In the result, the appeal of the Revenue is dismissed.
Order Pronounced in the Open Court on 07/11/2019.