ACIT, CIRCLE- 11(1), NEW DELHI vs. HERO WIND ENERGY (P) LTD., NEW DELHI

The ld. Senior DR supporting the action of the Assessing Officer submitted that the Assessing Officer was correct and justified in making disallowance and adding the same to the income of the assessee under section 14A of the I.T Act 1961 (for short the ‘ Act’) r.w.r 8D of the I.T Rules 1962 which was deleted by the ld. CIT(A) without any basis therefore impugned first appellate order may kindly be set aside by restoring that of the Assessing Officer.

Replying to the above, the ld. counsel of assessee drew our attention towards relevant paras 6 to 6.4 of first appellate order and submitted that the ld. CIT(A) was quite correct and justified in deleting the addition by following the judgment of Hon’ble Jurisdictional High Court of Delhi in the case of Joint Investment Pvt. Ltd. vs CIT reported as 372 ITR 694 (Del.).

On careful consideration of above submission, first of all, from relevant part of first appellate order we note that the ld. CIT(A) noted that the appellant has suo motto disallowed the entire amount of exempt income of Rs. 5,08,788/- and thus, the assessee has not claimed any exempt income in the return of income. Thereafter, the ld. CIT(A) by referring to the judgment of Hon’ble jurisdictional High Court of Delhi in the case of Joint Investment Pvt. Ltd. vs CIT(supra) held that the disallowance u/s. 14A r.w.r 8D of the Rules cannot exceed to the exempt income and hence suo motto disallowance made by the assessee is reasonable and justified and no further disallowance is required to be made. We are unable to see any valid reason to interfere with the findings recorded by the ld. CIT(A) while deleting the addition and hence we uphold the same. Accordingly grounds of revenue are dismissed.

In the result, the appeal of revenue is dismissed.