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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI C.N. PRASAD, HONBLE
O R D E R PER C.N. PRASAD (JM) 1. This appeal is filed by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)–8, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 20.03.2018 for the A.Y. 2012-13. Revenue has challenged the order of the Ld.CIT(A) in deleting the disallowance made u/s. 14A r.w. Rule 8D(2)(ii) of I.T. Rules.
(A.Y: 2012-13) M/s. High Scale Trading Pvt. Ltd., 2. Ld. Counsel for the assessee, at the outset submitted that the assessee has not earned any dividend/exempt income and therefore there shall not be any disallowance u/s. 14A when there was no exempt income earned by the assessee during the year. Ld. Counsel for the assessee submitted that Ld.CIT(A) following the decision of the Hon'ble Bombay High Court in the case of M/s. India Advantage Securities Ltd. [380 ITR 471] wherein it has been held that there cannot be any disallowance u/s. 14A when there is no exempt income, deleted the disallowance. Therefore, it is submitted that the issue is squarely covered by the decision of the Hon'ble Bombay High Court.
Ld. DR vehemently supported the orders of the Assessing Officer.
Heard rival submissions, perused the order of the Ld.CIT(A), it is the finding of the Ld.CIT(A) that there is no dispute on the fact that during the assessment year under consideration assessee has not earned any exempt income. Ld.CIT(A) referring to the decision of the in the case of Delite Enterprises in ITA.No. 2983/M/2005 (Bom) and the Hon'ble Bombay High Court in the case of M/s. India Advantage Securities Ltd. (supra) deleted the disallowance as in both these decisions it has been held that if there is no income earned by the assessee which is claimed to be exempt, no disallowance u/s. 14A can be made. As the Ld.CIT(A)
(A.Y: 2012-13) M/s. High Scale Trading Pvt. Ltd., followed the decision of the Hon'ble Bombay High Court in deleting the disallowance, I do not see any infirmity in the order passed by the Ld.CIT(A). Thus, I sustain the order of the Ld.CIT(A) and reject the grounds raised by the Revenue.
In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on the 29th March, 2019