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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
Before: SHRI C.N. PRASAD, HONBLE & SHRI MANOJ KUMAR AGGARWAL, HONBLEShri Saurabh Despande
O R D E R PER C.N. PRASAD (JM) 1. This appeal is filed by the Revenue against the order of the Ld.CIT(A)-29, Mumbai dated 11.12.2015 in deleting the disallowance made u/s. 14A r.w. Rule 8D of the I.T. Rules.
At the outset the Learned Counsel for the assessee submits that during this Assessment Year the assessee had not earned any exempt income and therefore there should not be any disallowance u/s. 14A r.w.
(A.Y: 2011-12) M/s. CIG Realty Fund Rule 8D. Ld. Counsel for the assessee submits that Ld.CIT(A) following the decision of the Hon'ble Delhi High Court in the case of CIT v. Holicim India P. Ltd. [90 CCH 0081] held that if there is no dividend income earned by the assessee, section 14A cannot be invoked. Ld. Counsel for the assessee also placed reliance on the decision of the Hon'ble Delhi High Court in the case of Cheminvest Limited v. CIT [378 ITR 33] and submits that similar view has been taken by the Hon'ble Delhi High Court that if no dividend income is earned there should not be any disallowance u/s. 14A of the Act.
Ld.DR strongly supported the order of the Assessing Officer.
We have heard the rival submissions, perused the orders of the authorities below. The issue before us is whether there can be any disallowance u/s. 14A r.w. Rule 8D, if there is no exempt income earned by the assessee during the Assessment Year. We find that the Hon'ble Jurisdictional High Court in the case of PCIT v. Ballarpur Industries Ltd. in ITA.No. 51 of 2016 dated 13.10.2016 following the decision of the Hon'ble Delhi High Court in the case of Cheminvest Limited v. CIT (supra) held that provisions of section 14A would not be applicable in the absence of any dividend/exempt income earned by the assessee during the Assessment Year.
(A.Y: 2011-12) M/s. CIG Realty Fund 5. In the case of Dish TV India Ltd. v. ACIT [167 ITD 412] following the decision of the Hon'ble Jurisdictional High Court it has been held as under: “11. After hearing the rival submissions and going through the order of the tax authorities below we noted that the assessee has not earned any exempt dividend income during the impugned Assessment Year. Since the assessee has not earned any exempt income no disallowance under section 14A of the Income Tax Act can be made in view of the decision in the case of Pr. CIT v. Ballarpur Industries Ltd. [IT Appeal No. 51 of 2016, Dated 13-10-2016] in which the Hon'ble Jurisdictional High Court, following the decision of the Hon'ble Delhi High Court in the case of Cheminvest Ltd. v. CIT [2015] 378 ITR 33 / 234 Taxman 761 / 61 taxmann.com 118 took the view that provisions of section 14A of the Income Tax Act, 1961 would not apply to the facts of the case as no exempt income was received or receivable during the relevant previous year by the assessee. Similar view has been taken by the Hon'ble Allahabad High Court in the case of CIT v. Shivam Motors (P) Ltd. [2015] 230 Taxman 63 / 55 taxmann.com 262 (All.) and that of Hon'ble Punjab & Haryana High Court in the case of CIT v. Winsome Textile Industries [2009] 319 ITR 204.”
Respectfully following the said decisions, we uphold the order of the Ld.CIT(A) in deleting the disallowance made u/s. 14A r.w. Rule 8D of the I.T. Rules.
In the result, appeal of the Revenue is dismissed.
Order pronounced in the open court on the 02nd January, 2018.