DABWALI TRANSPORT COMPANY LIMITED,MOHALI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CHANDIGARH

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ITA 41/CHANDI/2024Status: DisposedITAT Chandigarh30 December 2024AY 2017-18Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)2 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 no exempt income is earned, no disallowance under Section 14A can be made. This position is supported by various High Court decisions.

What were the facts?

The assessee appealed against a disallowance of Rs. 33,56,578/- under Section 14A. The assessee contended that no exempt income was earned during the relevant assessment year.

What were the issues?

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

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(3)Show list

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िनधा�रती क� ओर से/Assessee by : Shri Ashwani Kumar, C.A राज�व क� ओर से/ Revenue by : Shri Vivek Vardhan, JCIT, Sr. DR सुनवाई क� तारीख/Date of Hearing : 18/12/2024 उदघोषणा क� तारीख/Date of Pronouncement : 30/12/2024 आदेश/Order PER VIKRAM SINGH YADAV, A.M. : This is an appeal filed by the Assessee against the order of the Ld. CIT (A)/NFAC, Delhi dt. 28/12/2023 pertaining to Assessment Year 2017-18 wherein the sole ground of appeal relates to sustenance of disallowance of Rs. 33,56,578/- under Section 14A of the Act.

2. During the course of hearing, the Ld. AR submitted that it is an undisputed fact that the assessee has not earned any exempt income during the year under consideration and in such a situation, where no exempt income has been earned, the question of disallowance of any expenditure in relation to earning of the exempt income does not arise for consideration. It was submitted that it is now a settled position as supported by the decision of various authorities and in this regard, our reference was drawn to the decision of Hon’ble Punjab & Haryana High Court in case of CIT Vs. Lakhani Marketing (2014) 49 taxmann.com 257 (P& H) and Pr. CIT-1, Vs M/s Vardhman Chemtech (P) Ltd. (2020) 423 ITR 241 (P&H). It was further submitted that the Hon’ble

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