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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 SMT. BEENA A. PILLAI SMT. BEENA A. PILLAISMT. BEENA A. PILLAI SMT. BEENA A. PILLAI
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 2009-10 is directed against the order of learned CIT(A)-IX, New Delhi dated 22nd January, 2014.
The grounds raised in this appeal by the assessee read as under:-
“1(i) That on the facts and circumstances of the case, the CIT(A) was not justified in confirming disallowance of Rs.16,03,821/- under rule 8D even though there is no case of any expenditure relating to exempt income on any such finding by the Assessing Officer in the context of provisions of sec. 14A of the Income Tax Act, 1961.
(ii) That in the absence of any finding regarding any such expenditure in the context of provisions of sec. 14A(2) & (3) of the Income Tax Act, 1961, there is no factual or legal basis for any disallowance.
2 ITA-1183/Del/2014
2. That in the alternative disallowance is highly arbitrary and excessive.”
We have heard the arguments of both the sides and have perused the material placed before us. We find that the identical issue has been considered by the ITAT in assessee’s own case for assessment year 2007-08 vide ITA No.3298/Del/2012. In the said order, the CIT(A) had allowed relief to the assessee and the Revenue was in appeal against the order of CIT(A). The ITAT upheld the order of the CIT(A) with the following finding:-
“5. Ld.counsel for the assessee submitted that assessee had not earned any exempt income during the year. Therefore, in any view of the matter, no disallowance could be made u/s 14A. In this regard, ld.counsel has relied on following decisions:
- Hon’ble Delhi High Court’s decision dated 5-9-2014 (ITA nos.486/2014 & in the case of CIT Vs. Holcim India P.Ltd. - Hon’ble Punjab & Haryana High Court’s decision in CIT Vs. M/s Lakhani Marketing Incl. (ITA No.970/2008 decided on 2- 4-2014). - Hon’ble Punjab & Haryana High Court’s decision in CIT Vs. Hero Cycles Ltd. 323 ITR 518; and - Hon’ble Punjab & Haryana High Court’s decision in CIT Vs. Winsome Textile Industries Ltd. 319 ITR 204.
We have heard rival contentions and perused the material available on record. In view of the aforementioned decisions, relied upon by the assessee, wherein a consistent view has been taken that where no exempt income is earned, there could not be any disallowance u/s 14A, we find no merit in the ground taken by the Revenue. Accordingly, ground no.1 is dismissed.”
In the year under consideration also, there is no dividend income. Therefore, relying upon the above decision of ITAT and also the decision of Hon'ble Delhi High Court in the case of CIT Vs. Holcim India P. Ltd. vide order dated 5th September, 2014,
3 ITA-1183/Del/2014 we hold that since there is no exempt income, no disallowance u/s 14A could be made. Accordingly, the grounds raised by the assessee are allowed.
In the result, the appeal filed by the assessee is allowed. Decision pronounced in the open Court on 29.03.2016.