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Income Tax Appellate Tribunal, “K” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM & SHRI RAM LAL NEGI, JM
BEFORE SHRI SHAMIM YAHYA, AM AND SHRI RAM LAL NEGI, JM (Assessment Year: 2011-12) M/s. First Winner Industries Ltd. Add. CIT, Range 9(1), 605, Business Classic, Mumbai Vs. Chincholi Bunder Road, Malad (W), Mumbai-64 PAN/GIR No. AAACF 7079 H (Appellant) (Respondent) : & (Assessment Year: 2011-12) M/s. First Winner Lifestyle Ltd. Add. CIT, Range 9(1), 605, Business Classic, Mumbai Vs. Chincholi Bunder Road, Malad (W), Mumbai-64 PAN/GIR No. AACCR 3942 F (Appellant) : (Respondent) Appellant by : Shri Nikhil Bajaj Respondent by : Shri V. Jenardhanan Date of Hearing : 12.07.2018 Date of Pronouncement : 05.09.2018 O R D E R Per Shamim Yahya, A. M.:
These are appeals by two assessee’s against the respective order of the ld.
Commissioner of Income Tax (Appeals) for assessment year 2011-12.
Since the issues are common and connected and the appeals were heard together these are being consolidated and disposed of together by this common order.
The common issue raised is that the ld. Commissioner of Income Tax (Appeals) erred in sustaining the disallowance u/s. 14A as under:
Rs.1,02,62,673/- Rs.10,10,722/- 4. At the outset, it is noted that there is a delay of 89 days in ITA No.
5730/Mum/2016 and 142 days in in filing the appeals. The reasonable cause for the delay has been attributed to be the ailment of Director. In support of this, medical certificate has been duly attached.
Upon careful consideration and hearing the learned departmental representative we condone the delay. In these cases, the assessing officer has invoked the provisions of section 14A and disallowed the aforesaid sums. The assessing officer has rejected the assessee’s claim that since there was no exempt income, disallowance u/s.14A is not sustainable. In doing so, the assessing officer has placed reliance upon the CBDT Circular in this regard.
Upon the assessee's appeal, the ld. Commissioner of Income Tax (Appeals) has sustained the order of the assessing officer.
Against this order, the assessee is in appeal before us.
We have heard the learned departmental representative. None appeared on behalf of the assessee. The adjournment petition filed by the assessee in this regard has been rejected by us as. In our opinion, the matter can be disposed of by hearing the learned departmental representative and perusing the records.
We note that in this case it is the claim of the assessee that the assessee has not earned any exempt income. This fact has been duly noted by the authorities below. There is no dispute in this regard. In these circumstances, when the assessee has not earned any exempt income, disallowance u/s.14A is not sustainable. This position is supported by the Hon’ble Delhi High Court decision in the case of Cheminvest Ltd vs CIT [2015] 378 ITR 33 (Del) which was followed by the Hon'ble jurisdictional High Court in the case of Principal CIT vs. Ballarpur Industries Ltd. (in of 2016). Respectfully following the precedent, we hold that since the assessee has not earned any exempt income, disallowance u/s.14A is not at all sustainable. Accordingly, we set aside the order's of authorities below and delete the addition.
In the result, these appeals by the assessee stand allowed.
Order pronounced in the open court on 05.09.2018