ACIT, NEW DELHI vs. M/S. MILK FOOD LTD., NEW DELHI

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ITA 5280/DEL/2015Status: DisposedITAT Delhi22 November 2017AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the deletion of the disallowance under Section 14A. It was held that no disallowance can be made under Section 14A if the assessee has not earned any exempt income.

What were the facts?

The Assessing Officer made a disallowance under Section 14A read with Rule 8D amounting to Rs. 36,84,029. The assessee did not earn any exempt income. The CIT(A) deleted this addition.

What were the issues?

Whether disallowance under Section 14A is permissible when the assessee has not earned any exempt income.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, DELHI BENCHES : F : NEW DELHI

Before: SHRI R.S. SYAL & SMT BEENA PILLAI

For Appellant: Shri R.S. Singhvi, CA
For Respondent: Shri Atiq Ahmad, Sr. DR
Hearing: 21.11.2017Pronounced: 22.11.2017

Date of Hearing : 21.11.2017 Date of Pronouncement : 22.11.2017 ORDER PER R.S. SYAL, VP: This appeal filed by the Revenue is directed against the order passed by the CIT(A) on 24.04.2015 in relation to the assessment year 2010-11.

2.

The only issue raised in this appeal is against deletion of disallowance u/s 14A amounting to Rs.36,84,029/-.

3.

Briefly stated, the facts of the case are that the Assessing Officer computed disallowance u/s 14A read with Rule 8D at Rs.36,84,029/- despite noticing on page 5 of the assessment order that the assessee did not earn any exempt income. The ld. CIT(A) deleted the addition by following certain judgments. The Revenue is aggrieved against such deletion of addition and is in appeal before us.

4.

Having heard both the sides and perused the relevant material on record, we find that this issue is no more res integra in view of the judgment of the Hon'ble jurisdictional High Court in the case Cheminvest Ltd. vs. CIT (2015) 378 ITR 33 (Del), wherein it has been held that if there is no exempt income, there can be no question of making any disallowance u/s 14A. Similar view has been taken by the Hon'ble jurisdictional High Court in CIT vs. Holcim India P. Ltd. (2014)

90CCH 081-Del-HC. In view of these binding precedents providing for not making any disallowance u/s 14A in the absence of any exempt income, which are squarely applicable to the facts of the instant case, we uphold the view taken by the ld. CIT(A) on this issue.

5.

In the result, the appeal is dismissed.

Order pronounced in the open court on 22nd November, 2017.

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