ASHOK MAHINDRA vs. ITO WARD 2 (2),

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ITA 2632/DEL/2007Status: DisposedITAT Delhi04 December 2015AY 2000-20012 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 no disallowance under Section 14A can be made when there is no exempt income earned. This decision followed the jurisdictional High Court's rulings in Cheminvest Ltd. and Holcim India Pvt. Ltd.

What were the facts?

The assessee did not earn any dividend income during the assessment years 2000-2001 and 2004-05. The Assessing Officer made a disallowance under Section 14A of the Income Tax Act.

What were the issues?

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

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “A”, NEW DELHI

Before: SHRI J. SUDHAKAR REDDY & SHRI A.T. VARKEY

For Appellant: Shri Somil Aggarwal, Advocate

Appellant by : Shri Somil Aggarwal, Advocate Respondent by : Sh. Manoj K Chopra, Sr. DR ORDER

Both these appeals are filed by the assessee. The sole issue that arises for our adjudication is whether the disallowance made u/s 14A of the Income Tax Act 1961 (the Act) has been rightly sustained by the Ld.CIT(Appeals). The assessee has not pressed the grounds taken on reopening.

2.

Heard Shri Somil Aggarwal, the Ld.Counsel for the assessee and Shri Manoj K Chopra, Ld.Sr.D.R. on behalf of the Revenue.

3.

The undisputed facts in both these cases, is that the assessee has not earned any income by way of dividend during these two Assessment Years. Under these circumstances no disallowance can be made u/s 14A of the Act as held by the Hon’ble Delhi High Court in ITA 749/2014 in the case of Cheminvest Ltd. vs. CIT vide order dt. 2.9.2015 and the decision of the Hon’ble Delhi High Court in the case of CIT vs. Holcim India Pvt. Ltd. in ITA 486/2014 and ITA 299/2014 vide order dt. 5th September, 2014. Respectfully following the binding decisions of the Jurisdictional High Court, we allow the grounds of appeal raised in both the A.Ys 2000-2001 and 2004-05.

4.

In the result both the appeals of the assessee are allowed in part.

Order pronounced in the Open Court on 04th December,2015.

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