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Facts
The revenue filed an appeal against the CIT(A)'s order regarding a disallowance of Rs. 10,38,27,023/- made under Section 14A of the Income Tax Act for Assessment Year 2006-07. The assessee did not appear for the hearing, leading to exparte proceedings.
Held
The Tribunal held that no disallowance under Section 14A of the Act is required if the assessee has not earned any exempt income during the relevant assessment year. This decision was based on precedents set by the Hon'ble Delhi High Court and the ITAT Special Bench.
Key Issues
Whether disallowance under Section 14A of the Income Tax Act is applicable when the assessee has not earned any exempt income during the year.
Sections Cited
Section 14A of the Income Tax Act
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: SH. SAKTIJIT DEY & SH. N. K. BILLAIYA
BEFORE SH. SAKTIJIT DEY, VICE PRESIDENT AND SH. N. K. BILLAIYA, ACCOUNTANT MEMBER Assessment Year: 2006-07 DCIT Vs. M/s. Holcim India Pvt. Ltd. Suite No. 304, 3rd Floor, Circle- 11 (1) New Delhi DLF South Court, A-1, Saket, New Delhi-110017 PAN No.AABCH3635C (APPELLANT) (RESPONDENT) Appellant by Sh. Subhra Jyoti Chakraborty, CIT DR Respondent by None Date of hearing: 01/02/2024 Date of Pronouncement: 01/02/2024 ORDER PER N. K. BILLAIYA, AM:
This appeal by the revenue is preferred against the order of the CIT(A)-4, New Delhi dated 27.02.2015 pertaining to A.Y. 2006-07.
The grievance of the revenue read as under :- “1. Whether on the facts and circumstances of the case & in law, the Id. CIT(A) in right is not appreciating the cardinal difference of the facts of the case in A.Y. 2007-08 & A.Y. 2008-09 which have been adjudicated upon by the Hon'ble High Court of Delhi in the assessee own case, from the facts of the case in A.Y. 2006-07 which are under considerations.
2. Whether on the facts and circumstances of the case & in law, the Id. CIT(A) in not appreciating that the case of A.Y. 2007-08 hinged upon the positive finding by the Id. CIT (A) that the assessee business had set up which was not confronted by any higher appellate forum whereas in the A.Y. 2006-07 there was a clear finding by the Ld. CIT(A) that the business of the assessee had not been set up which was affirmed by the Hon'ble ITAT and was not challenged in any further appeal
Whether on the facts and circumstances of the case & in law, the Id. CIT(A) is right in applying the ratio decidend of the judgment of the Hon'ble High Court in A.Y. 2007-08 & 2008-09 to the case of A.Y. 2006-07 without appreciating that the facts are pole apart.
The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing.”
3. None appeared on behalf of the assessee inspite of notices we decided to proceed exparte. The DR was heard at length case record carefully perused. The dispute revolves around the disallowance made u/s. 14A of the Act amounting to Rs.103827023/-.
4. A perusal of the orders of the authorities below show that the assessee has not earned any exempt income during the year, therefore, no disallowance need to be made u/s. 14A of the Act as held by the Hon’ble High Court of Delhi in the case of Corrtech Energy Pvt. Ltd. 372 ITR 97 and also by special Bench of ITAT Cheminvest Ltd. 121 ITD 318 which decision has been affirmed by the Hon’ble Delhi High Court.
Respectfully following the same the appeal is dismissed.
Decision announced in the open court on 01.02.2024.