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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI C.N. PRASAD, HONBLE & SHRI G. MANJUNATHA, HONBLE
O R D E R PER C.N. PRASAD (JM) 1. These two appeals are filed by the Revenue against different orders of the Ld. Commissioner of Income–tax (Appeals)-16, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 02.05.2018 for the A.Ys. 2013-14 & 2014-15.
2 & 5219/MUM/2017 M/s. Capital First Ltd., 2. In both these appeals the Revenue challenged the order of the Ld. CIT(A) in deleting the disallowance made u/s. 14A r.w. Rule 8D of the I.T. Rules.
At the outset, Ld. Counsel for the assessee submitted that in both the years the assessee has not earned any exempt income and therefore, there is no justification in applying the provisions of section 14A r.w. Rule 8D of I.T. Rules and disallowing the expenses attributable for earning exempt income.
Ld. DR vehemently supported the orders of the Assessing Officer.
We have heard the rival submissions, perused the orders of the Authorities below. We find that the Ld. CIT(A) noticed that the assessee had not earned any exempt income during the A.Ys. 2013-14 & 2014-15 and therefore, no disallowance should be made u/s. 14A r.w. Rule 8D of I.T. Rules. Following the decision of the Mumbai Bench of the Tribunal in the case of M/s. Morgan Stanley India Securities Ltd., in ITA.No. 114/Mum/2013. and the Hon’ble Delhi High Court in the case of cheminvest v. CIT in ITA.No. 749 of 2014, the Ld. CIT(A) deleted the disallowance made u/s. 14A r.w. Rules 8D of I.T. Rules. The Hon’ble Bombay High Court in the case of Pr. CIT v. M/s. Ballarpur Industries Ltd in ITA.No. 51 of 2016 dated 13.10.2016 had taken a similar view that when
3 & 5219/MUM/2017 M/s. Capital First Ltd., there is no exempt income there should not be any disallowance u/s. 14A of the Act. Respectfully following the same, we uphold the order of the Ld.CIT(A) and reject the grounds raised by the Revenue.
In the result, appeals of the Revenue are dismissed.
Order pronounced in the open court on the 30th January, 2019