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

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ITA 2811/DEL/2014Status: DisposedITAT Delhi02 January 2017AY 2008-092 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that if there is no exempt income, then no disallowance under Section 14A of the Act can be made. Respectfully following the jurisdictional High Court's decisions, the disallowance was deleted.

What were the facts?

The assessee appealed against a disallowance made under Section 14A of the Income-tax Act. The assessee argued that no disallowance could be made as there was no exempt income during the assessment year.

What were the issues?

Whether disallowance under Section 14A is permissible when the assessee has no exempt income.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL

Before: SHRI G.D. AGRAWALG.D. AGRAWAL & AND BEFORE SHRI G.D. AGRAWALG.D. AGRAWAL & AND SHRI KULDIP SINGH SHRI KULDIP SINGHSHRI KULDIP SINGH SHRI KULDIP SINGH

For Appellant: Shri Neeraj Jain and Shri Anshul Sachar, Advocates
For Respondent: Shri Amrit Lal, Senior DR
Hearing: 22.12.2016Pronounced: 02.01.2017

PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP :- PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP This appeal by the assessee for the assessment year 2008-09 is directed against the order of learned CIT(A)-XX, New Delhi dated 18th February, 2014.

2.

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/-.

3.

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.

2 ITA-2811/Del/2014

4.

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

5.

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.

6.

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

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