M/S. PARISHUDH FINANCE CO. P. LTD.,NEW DELHI vs. ITO, NEW DELHI

At the time of hearing before us, nobody appeared on behalf of the assessee-respondent despite service of notice. This appeal of the assessee is, therefore, being decided ex-parte qua the assessee- respondent on merits after hearing the arguments of learned DR.

Ground Nos.1, 2 & 3 of the assessee’s appeal are against the disallowance of `3,42,000/- under Section 14A of the Income-tax Act, 1961 read with Rule 8D.

We have heard the arguments of learned DR and perused the assessment order. From page 1 of the assessment order, it is clear that no dividend income was earned by the assessee during the previous year. 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 Vs. CIT-VI in order dated 2nd September, 2015 and CIT-IV Vs. Holcim India P.Ltd. in ITA No.486/2014 & 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 of `3,42,000/- made by the Assessing Officer and sustained by learned CIT(A) u/s 14A of the Act. Ground Nos.1, 2 & 3 are accordingly allowed.

Ground No.4 of the assessee’s appeal is against charging of interest u/s 234B, 234C & 234D of the Act. The same is admitted to be consequential. We, therefore, direct the Assessing Officer to recompute the interest, if any, in accordance with law.

In the result, the appeal of the assessee is allowed. Decision pronounced in the open Court on 19.05.2016.