ITO, BANGALORE vs. M/S MARDEC RK LATEX PVT. LTD., BANGALORE

This appeal is preferred by the revenue against the order of CIT(Appeals) on a solitary ground that the CITA has failed to appreciate that the AO has rightly invoked the provisions of section 14A of the I.T. Act r.w. Rule 8D of the I.T. Rules in arriving at the disallowance made in the assessment order.

During the course of hearing, the ld. counsel for the assessee has invited our attention that assessee did not earn any exempt income, therefore there was no question of disallowance u/s. 14A of the Act. In support of his contention, assessee has placed reliance on the order of Bangalore Bench of the Tribunal in the case of M/s. Alliance Infrastructure Projects Pvt. Ltd. v. DCIT [ITA Nos. 220 & 1043(BNG)/2013] and the order of Chennai Bench of the Tribunal in the case of ACIT v. M. Baskaran [ITA No.1717/Mds/2013] in which it has been held that in case of assessee is not receiving any exempt income during the relevant financial year, disallowance u/s. 14A cannot be made. Reliance was also placed upon the order of Ahmedabad Bench of Tribunal in the case of M/s. Suzlon Energy Ltd. v. DCIT in and 1367/Ahd/2008. In these cases, the Tribunal has categorically held that in the absence of exempt income, the provisions of section 14A cannot be invoked.

Having carefully examined the orders of lower authorities, we find that the AO has given a categorical finding in his order that there was no exempt income earned during the year. Therefore, following the aforesaid orders of the Tribunal, the CIT(Appeals) has deleted the disallowance made u/s. 14A of the Act. Since the CIT(A) has decided the issue following the orders of Tribunal, we find no infirmity therein and accordingly we confirm the same.

CO is filed by the assessee in support of the order of CIT(Appeals). Since the appeal of the revenue is dismissed, CO of the assessee has become infructuous and we dismiss the same.

In the result, the appeal and CO of the assessee are dismissed.