DCIT, NEW DELHI vs. M/S. JAYPEE COMMODITIES LTD., NEW DELHI

The only ground raised by the Revenue is against the deletion of disallowance of expenditure under Section 14A read with Rule 8D.

We have heard the arguments of both the sides and perused the material placed before us. At the time of hearing before us, the learned counsel for the assessee has pointed out that the assessee has earned no dividend income during the year under consideration. Thus, there was no exempt income. Therefore, Section 14A cannot be pressed into operation. We find this issue to be covered in favour of 2 ITA-4090/Del/2015 the assessee by the decision of Hon'ble Jurisdictional High Court in the case of Cheminvest Limited Vs. CIT-VI – [2015] 378 ITR 33 (Delhi) and CIT Vs. Holcim India P.Ltd. – [2014] 272 CTR 282 (Delhi), wherein Hon'ble Jurisdictional High Court has held that if there is no exempt income, then no disallowance u/s 14A of the Act can be made. Admittedly, in the case of the assessee, there is no exempt income. Therefore, respectfully following the above decisions of Hon'ble Jurisdictional High Court, we uphold the order of learned CIT(A) and delete the disallowance of `30,60,000/- made by the Assessing Officer u/s 14A read with Rule 8D. The ground raised by the Revenue is thus dismissed.

In the result, the appeal of the Revenue is dismissed. Decision pronounced in the open Court on 10.01.2017.