DCIT, FARIDABAD vs. M/S. LAKHANI RUBBER UDYOG P. LTD., FARIDABAD

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.”

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.