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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: SH. N. K. BILLAIYA & SH. K.N CHARY
This appeal is preferred against the order of the CIT(A)-35, New Delhi dated 05.10.2017 pertaining to A. Y.2014-15.
The sum and substance of the grievance of the revenue is that the CIT(A) erred in deleting the disallowance of Rs.2,03,30,249/-made u/s. 14A of the IT Act r.w. rule 8D.
2 3. The facts on record show that during the year under consideration the assessee did not earn any exempt income. The Assessing Officer was of the firm belief that even there is no exempt income still expenses have to be disallowed u/s 14A r.w rule 8D of the IT Rules. He accordingly computed the disallowance at Rs.2,03,30,249/- and added to the income of the assessee.
The assessee carried the matter before the CIT(A) and pointed out that the Hon’ble High Court of Delhi in the case of CHEM Invest Pvt. Ltd. Vs. CIT reported 378 ITR 33 has held that if there is no exempt income no disallowance can be made.
After considering the reply of the assessee, the CIT(A) found that the ratio laid down by Hon’ble Delhi High Court clearly applies in the case of the assessee and accordingly deleted the addition.
Before us the DR strongly supported the findings of the Assessing Officer but could not bring any distinguishing decision.
It is an undisputed fact that during the year the assessee did not earn any exempt income. The Hon’ble High Court of Delhi in the case of CHEM Invest Pvt. Ltd. Vs. CIT (supra) has clearly held that if there is no exempt income no disallowance can be made. This was subsequently followed by the Hon’ble High Court of Delhi in the case of PCIT Vs. IL & FS Energy Development Company Limited reported 399 ITR 483.
3 8. Respectfully following the decisions of Hon’ble Jurisdictional High Court of Delhi we decline to interfere with the findings of the CIT(A), in the result the appeal filed by the revenue is accordingly dismissed.
In the result, the appeal filed by the revenue is accordingly dismissed. Order pronounced in the open court on 20.03.2019.