M/S. HUGHES NETWORK SYSTEMS INDIA LTD.,NEW DELHI vs. DCIT, NEW DELHI

The only ground raised by the assessee in this appeal is against the disallowance under Section 14A of the Income-tax Act, 1961 amounting to `10,59,986/-.

At the time of hearing before us, the learned counsel for the assessee pointed out that there is no exempt income during the year under consideration. Therefore, in view of the decision of Hon'ble Jurisdictional High Court in the case of Cheminvest Limited Vs. CIT – [2015] 378 ITR 33 (Delhi), no disallowance u/s 14A can be made.

Learned DR, on the other hand, relied upon the orders of authorities below.

We have carefully considered the arguments of both the sides and perused the material placed before us. We find this issue to be covered in favour of the assessee by the decision of Hon'ble Jurisdictional High Court in the case of Cheminvest Limited (supra) and CIT-IV Vs. Holcim India P.Ltd. in & 299/2014, order dated 5th September, 2014, 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 delete the disallowance made u/s 14A of the Act.

In the result, the appeal of the assessee is allowed. Decision pronounced in the open Court on 02.01.2017.