DCIT 1(3)(2), MUMBAI vs. TATA ADVANCED SYSTEMS LTD., MUMBAI

The captioned appeal has been filed at the instance of the Revenue against the order of the Commissioner of Income Tax (Appeals)-3, Mumbai, (‘CIT(A)’ in short), dated 19.01.2018 [DCIT vs. M/s. Tata Advanced Systems Ltd.] A.Y. 2014-15 - 2 - arising in the assessment order dated 28.12.2016 passed by the Assessing Officer (AO) under s. 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2014-15.

The solitary issue arising in the instant appeal of the Revenue relates to disallowance of expenditure relatable to exempt income in terms of Section 14A of the Act.

When the matter was called for hearing, the learned AR for the assessee in Revenue’s appeal submitted at the outset that the assessee has not declared any exempt income by way of dividend income etc. and therefore Section 14A of the Act has no application in the facts of the case. It was further pointed out that the issue is squarely covered by several judicial precedents including the decision of the Hon’ble Supreme Court in the case of Pr.CIT vs. Oil Industry Development Board [2019] 103 taxmann.com 326 (SC).

In the light of the decision of the Hon’ble Supreme Court in Oil Industry Development Board (supra), it is well settled that in the absence of any exempt income, disallowance under s.14A of the Act of any amount is not permissible in law. Section 14A of [DCIT vs. M/s. Tata Advanced Systems Ltd.] A.Y. 2014-15 - 3 - the Act is a non-starter in the instant case. Thus, we find no merit in the grievance of the Revenue.

In the result, the appeal filed by the Revenue is dismissed.