TIDEL PARK LTD. ,CHENNAI vs. ACIT CORPORATE CIRCLE 3(1) , CHENNAI

The assessee filed this appeal against the order of the learned Commissioner of Income Tax (Appeals)-11, Chennai in dated 21.02.2019 for the assessment year 2014-15.

M/s. Tidel Park Limited, is engaged in the business of IT enabled services and BPO service provider. While making the assessment for the assessment year 2014-15, the AO, inter-alia, made disallowance U/s.14A r.w. Rule 8D of Rs.64,22,758/-. Aggrieved against that order, the assessee filed appeal before the CIT(A). The ld.CIT(A) dismissed the appeal. Aggrieved against that order, the assessee filed an appeal before this Tribunal.

The ld.AR pleaded that the ld.CIT(A) failed to appreciate that the assessee has not derived any exempt income during the year relevant to the assessment year and therefore, the AO was not correct in making the disallowance U/s.14A r.w. Rule 8D, as per the Hon’ble Supreme Court decision in the case of CIT vs. Chettinad Logistics P. Ltd., reported in [2018] 95 taxmann.com 250 (SC). In this regard, he filed a copy of the financial statement for the relevant period in support of the contention that the assessee has not received any dividend. Per contra, the ld.DR supported the orders of the lower authorities.

We heard the rival submissions. Since, the assessee did not have any exempt income during the year relevant to the assessment year, in accordance with the Hon’ble Apex Court’s decision, the disallowance made U/s.14A r.w. Rule 8D is not warranted and hence, the AO is directed to delete the addition. The corresponding ground of the assessee is allowed.