Cheminvest Ltd. v. ITO

121 ITD 318Income Tax Appellate Tribunal2009#228 most cited

What is Cheminvest Ltd. v. ITO authority for?

Disallowance of expenses under Section 14A of the Income Tax Act can be made even when no exempt income has been earned or received by the assessee.

338

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2015 to 2026.

Also referred to as

Cheminvest Ltd. v. ITO · Section 14A · disallowance of expenses · exempt income · no exempt income earned · Section 115JB · expenditure for exempt income · ITAT Special Bench · Delhi Tribunal · 121 ITD 318

Also reported as

317 ITR 86124 TTJ 577

Sections most often in play

Section 14ASection 143(3)Section 37(1)Section 115JBSection 1962Section 143(2)Section 1961Section 250

Issues it is cited on

disallowance u/s 14asection 14adisallowance under section 14asection 115jbprevious yearcompanytransfersection 14indiabusinesstotal incomesection 143

Judgments citing Cheminvest Ltd. v. ITO

Asst CIT 25(2), Mumbai vs. Ratansingh Rathord, Mumbai

In the result, both appeals filed by the Revenue, i

ITA 5297/MUM/2013[2010-11]Status: DisposedITAT Mumbai13 Jan 2016AY 2010-11

Bench: Shri Shailendra Kumar Yadav, Jm & Shri Rajesh Kumar, Am

For Appellant: Shri Chandra VijayFor Respondent: Shri D.C. Sejpal
Section 143(3)Section 14ASection 23(4)Section 24

…आयकर अपीलीय अिधकरण “डी” "यायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI "ी शैल" कुमार यादव, "याियक सद"य एवं "ी राजेश कुमार, लेखा सद"य के सम" । BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJESH KUMAR, AM आयकर अपील सं./ITA Nos. 3717 & 5297/Mum/2013 (िनधा"रण वष"/Assessment Years: 2009-10 & 2010-11 respectively) A C I T - 25(2) C-11, Pratyakshakar Bhavan Room No. 108, Bandra Kurla Complex अपीलाथ"/Appellant Bandra (E), Mumbai 400051 बनाम/ Vs. Shri Ratansingh M. Rathod ""यथ"/ B-1, Neela Apartment Respondent S.V.P. Road, Borivali (W) "थायी लेखा सं./PAN - AACPR4164L अपीलाथ" क" ओर से / Ap…

Asst CIT 25(2), Mumbai vs. Ratansingh M, .Rathod, Mumbai

In the result, both appeals filed by the Revenue, i

ITA 3717/MUM/2013[2009-10]Status: DisposedITAT Mumbai13 Jan 2016AY 2009-10

Bench: Shri Shailendra Kumar Yadav, Jm & Shri Rajesh Kumar, Am

For Appellant: Shri Chandra VijayFor Respondent: Shri D.C. Sejpal
Section 143(3)Section 14ASection 23(4)Section 24

…आयकर अपीलीय अिधकरण “डी” "यायपीठ मुंबई म"। IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI "ी शैल" कुमार यादव, "याियक सद"य एवं "ी राजेश कुमार, लेखा सद"य के सम" । BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJESH KUMAR, AM आयकर अपील सं./ITA Nos. 3717 & 5297/Mum/2013 (िनधा"रण वष"/Assessment Years: 2009-10 & 2010-11 respectively) A C I T - 25(2) C-11, Pratyakshakar Bhavan Room No. 108, Bandra Kurla Complex अपीलाथ"/Appellant Bandra (E), Mumbai 400051 बनाम/ Vs. Shri Ratansingh M. Rathod ""यथ"/ B-1, Neela Apartment Respondent S.V.P. Road, Borivali (W) "थायी लेखा सं./PAN - AACPR4164L अपीलाथ" क" ओर से / Ap…

ITO 8(2)-3, Mumbai vs. Sanjay Maganlal Mehta, Mumbai

Accordingly, the appeal filed by the revenue is not maintainable and is dismissed in limine

ITA 5598/MUM/2013[2010-11]Status: DisposedITAT Mumbai04 Jan 2016AY 2010-11

Bench: Shri Jason P. Boaz (Am) & Shri Ram Lal Negi (Jm)

For Appellant: Shri. Vivek OjhaFor Respondent: Shri. Jitendra Jain
Section 143(3)Section 14ASection 36(1)(iii)

…allowance and cannot be reduced by receipt of interest which is not related thereto and which would result in contravening clause 2(ii) of Rule 8D , as held by the Hon'ble ITAT Special Bench Delhi in para 43 of its order in the case of Cheminvest Ltd. vs. ITO 317 ITR 86." 5) The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the A.O. be restored. 6) The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary. 2. At the outset, it is noticed that, the disputed issue is only for Rs. 11,60,962/- and the tax effect on this amount i.…

DCIT 8(2), Mumbai vs. Hsbc Invest Direct (I) Ltd, Mumbai

In the result, appeal of the assessee is partly allowed whereas appeal of the revenue is dismissed

ITA 4673/MUM/2013[2009-10]Status: DisposedITAT Mumbai16 Dec 2015AY 2009-10

Bench: Shri Jason P Boaz & Shri Amit Shukla

For Respondent: Shri K Mohandas
Section 115JSection 143(3)Section 14ASection 234BSection 28

…5 HSBC Invest Direct (I) Ltd. (Formerly IL & FS Investmart Ltd) ITA No.1601/ Mum/2013 ITA No.4673/ Mum/2013 perusal of the assessment order, it is seen that the AO has relied upon the decision of ITAT Special Bench in the case of Chem Invest Ltd., reported in 317 ITR 86 (AT). Now, this decision of the Special Bench of the Tribunal, has been reversed by the Hon’ble Delhi High Court, as referred by the Ld. Counsel. However, if we agree with the contention of the Counsel that the decision of Delhi High Court should be applied and followed wherein it has been laid down that section 14A envisages there should be actua…

Hsbc Invest Direct (I) Ltd ( Formerly Il & Fs Investmart Ltd), Mumbai vs. DCIT 8(2), Mumbai

In the result, appeal of the assessee is partly allowed whereas appeal of the revenue is dismissed

ITA 1601/MUM/2013[2009-10]Status: DisposedITAT Mumbai16 Dec 2015AY 2009-10

Bench: Shri Jason P Boaz & Shri Amit Shukla

For Respondent: Shri K Mohandas
Section 115JSection 143(3)Section 14ASection 234BSection 28

…5 HSBC Invest Direct (I) Ltd. (Formerly IL & FS Investmart Ltd) ITA No.1601/ Mum/2013 ITA No.4673/ Mum/2013 perusal of the assessment order, it is seen that the AO has relied upon the decision of ITAT Special Bench in the case of Chem Invest Ltd., reported in 317 ITR 86 (AT). Now, this decision of the Special Bench of the Tribunal, has been reversed by the Hon’ble Delhi High Court, as referred by the Ld. Counsel. However, if we agree with the contention of the Counsel that the decision of Delhi High Court should be applied and followed wherein it has been laid down that section 14A envisages there should be actua…

Shri Suresh Verma, Delhi vs. ACIT, New Delhi

In the result, both the appeals filed by the assessee are allowed

ITA 1151/DEL/2013[2009-10]Status: DisposedITAT Delhi27 Nov 2015AY 2009-10

Bench: Shri N.K. Saini & Shri A.T. Varkey

For Appellant: S/Shri Salil Kapoor, Shubham Rastogi and Sumit Lokchandani, AdvocatesFor Respondent: Smt. Sunita Kejriwal, CIT DR
Section 132Section 142(1)Section 143(2)Section 14ASection 153A

…151/Del./2013 the disallowance u/s 14A of the Act and even if no income has been earned the disallowance has to be made u/s 14A of the Act read with Rule 8D of the IT Rules. Reliance was placed on the following case laws:- (i) Cheminvest Ltd. Vs ITO (2009) 121 ITD 318 (Del) (SB) (ii) Maxopp Investment Ltd. Vs CIT (2011) 15 Taxmann.com 390 (Del) 8. We have heard both the sides and perused the material on record. In the present case it is an admitted fact that the assessee had not earned any dividend income during the year under consideration. Now this issue is no longer Res-Integra as held by the Hon’ble juris…

Shri Suresh Verma, Delhi vs. ACIT, New Delhi

In the result, both the appeals filed by the assessee are allowed

ITA 1150/DEL/2013[2008-09]Status: DisposedITAT Delhi27 Nov 2015AY 2008-09

Bench: Shri N.K. Saini & Shri A.T. Varkey

For Appellant: S/Shri Salil Kapoor, Shubham Rastogi and Sumit Lokchandani, AdvocatesFor Respondent: Smt. Sunita Kejriwal, CIT DR
Section 132Section 142(1)Section 143(2)Section 14ASection 153A

…151/Del./2013 the disallowance u/s 14A of the Act and even if no income has been earned the disallowance has to be made u/s 14A of the Act read with Rule 8D of the IT Rules. Reliance was placed on the following case laws:- (i) Cheminvest Ltd. Vs ITO (2009) 121 ITD 318 (Del) (SB) (ii) Maxopp Investment Ltd. Vs CIT (2011) 15 Taxmann.com 390 (Del) 8. We have heard both the sides and perused the material on record. In the present case it is an admitted fact that the assessee had not earned any dividend income during the year under consideration. Now this issue is no longer Res-Integra as held by the Hon’ble juris…

Genesis Foods & Beverages Ltd, Thane vs. ITO WD 8(1)(4), Mumbai

In the result, appeal of the assessee is allowed

ITA 6902/MUM/2013[2008-09]Status: DisposedITAT Mumbai17 Nov 2015AY 2008-09

Bench: Shri Amit Shukla & Shri Ramit Kochar

For Respondent: Shri Abani Kanta Nayak
Section 143(3)Section 14ASection 271(1)(c)

…no dividend income had been earned by the Assessee in the relevant AY? The Court referred to the decision of this Court in Maxopp Investment Ltd. (supra) and to the decision of the Special Bench of the ITAT in this very case i.e. Cheminvest Ltd. v. CIT (2009) 317 ITR 86. The Court also referred to three decisions of different High Courts which have decided the issue against Revenue. The first was the decision in Commissioner of Income Tax, Faridabad v. M/s. Lakhani Marketing Incl. (decision dated 2nd April 2014 of the High Court of Punjab and Haryana in ITA No. 970/2008) which in turn referred to two earlier deci…

Genesis Foods & Beverages Ltd, Thane vs. ITO WD 8(1)(4), Mumbai

In the result, appeal of the assessee is allowed

ITA 6901/MUM/2013[2008-09]Status: DisposedITAT Mumbai17 Nov 2015AY 2008-09

Bench: Shri Amit Shukla & Shri Ramit Kochar

For Respondent: Shri Abani Kanta Nayak
Section 143(3)Section 14ASection 271(1)(c)

…no dividend income had been earned by the Assessee in the relevant AY? The Court referred to the decision of this Court in Maxopp Investment Ltd. (supra) and to the decision of the Special Bench of the ITAT in this very case i.e. Cheminvest Ltd. v. CIT (2009) 317 ITR 86. The Court also referred to three decisions of different High Courts which have decided the issue against Revenue. The first was the decision in Commissioner of Income Tax, Faridabad v. M/s. Lakhani Marketing Incl. (decision dated 2nd April 2014 of the High Court of Punjab and Haryana in ITA No. 970/2008) which in turn referred to two earlier deci…

DCIT, Circle-6, Kolkata vs. M/S. Integrated Coal Mining Ltd, Kolkata

In the result, the appeal of the revenue is dismissed

ITA 1138/KOL/2012[2008-2009]Status: DisposedITAT Kolkata13 Nov 2015AY 2008-2009

Bench: : Shri M. Balaganesh

For Appellant: Shri J.P Khaitan, ld.ARFor Respondent: Shri G.Mallikarjuna, CIT, ld.DR
Section 143(3)Section 14A

…income has been earned. We are of the view that ratio of these cases will apply mutatis mutandis under sec. 14A of the Act also while ascertaining the expenditure incurred for earning tax-free income from investment.” Cheminvest Ltd vs ITO reported in (2009) 121 ITD 318 (Del ITAT) - what one has to see is whether any expenditure has been incurred by an assessee in relation to an ITA Nos..1146, 1138/Kol/2012-C-AM 5 income that does not form part of total income of the assessee under this Act, and if the answer is in affirmative then that expenditure cannot be allowed. It held as under: “43. What one has to see i…

DCIT Cen Cir 18 & 19, Mumbai vs. Viraj Profiles Ltd, Mumbai

ITA 4439/MUM/2013[2008-09]Status: DisposedITAT Mumbai21 Oct 2015AY 2008-09

Bench: Shri Joginder Singh & Shri Ramit Kocharassessment Year: - 2008-09 Dcit,Central Circle-18 & 19 V. Viraj Profiles Limited Mumbai 10,Imperial Chamber,Wilson Road, Ballard Estate,Mumbai- 400 038 Pan/Gir No. Aabcv1740N Appellant Respondent

Section 10BSection 115JSection 14ASection 80G

…ded in the total income , whether received or not by relying on the decision of Hon’ble Delhi Tribunal in Aquarius Travels Pvt. Ltd. v. ITO (2008) 21 (II) ITCL 521 (Del-Trib.) and also relying on the decision of Delhi Tribunal In Cheminvest Ltd. v. ITO (2009) 121 ITD 318 that whenever any expenditure is incurred in relation to income which does not form part of total income, it has to suffer disallowance irrespective whether any income is earned or not. The CIT(A) held that the assessee company has claimed interest expenditure and it has not been able to demonstrate that the investment has been made solely out of…

Cheminvest Limited vs. Commissioner of Income Tax-VI

The appeal is allowed in the above terms

ITA/749/2014HC Delhi02 Sept 2015
Section 10(33)Section 14Section 143(3)Section 14ASection 260A

…ividend income had been earned by the Assessee in the relevant AY? The Court referred to the decision of this Court in Maxopp Investment Ltd. (supra) and to the decision of the Special Bench of the ITAT in this very case i.e. Cheminvest Ltd. v. CIT (2009) 317 ITR 86. The Court also referred to three decisions of different High Courts which have decided the issue against Revenue. The first was the decision in Commissioner of Income Tax, Faridabad v. M/s. Lakhani Marketing Incl. (decision dated 2nd April 2014 of the High Court of Punjab and Haryana in ITA No. 970/2008) which in turn referred to two earlier…

Shriram Capital Limited, Chennai vs. DCIT, Chennai

In the result, the appeals filed by the assessee in ITA Nos

ITA 513/CHNY/2015[2011-2012]Status: DisposedITAT Chennai25 Jun 2015AY 2011-2012

Bench: Shri Chandra Poojari & Shri Challa Nagendra Prasadआयकर अपील सं./ I.T.A. Nos.512 &513 /Mds/2015 ("नधा"रण वष" / Assessment Year : 2010-2011 & 2011- 2012)

For Appellant: Shri. R. Sivaraman, AdvocateFor Respondent: Shri. N. Rengaraj, IRS, CIT
Section 14A

…h in the case of Siva Industries & Holding, Ltd. vs. ACIT reported in 54 SOT 49 Chennai(2012), held that even in a year, where no exempt 14A can be made. The Tribunal while delivering the order has followed the order, of the Delhi Special Bench reported in 121 ITD 318 in the case of Chem Invest Ltd. vs. ITO wherein it was held that disallowance u/s.14A can be made even in the year where no exempt income has been earned or received by the assessee. The High Court of Bombay in the case of M/s. Godrej & Boyce. Mfg. Co. Ltd. vs CIT reported in 328 ITR 81 held that the AO is duty bound to determine the expenditu…

Shriram Capital Limited, Chennai vs. DCIT, Chennai

In the result, the appeals filed by the assessee in ITA Nos

ITA 512/CHNY/2015[2010-2011]Status: DisposedITAT Chennai25 Jun 2015AY 2010-2011

Bench: Shri Chandra Poojari & Shri Challa Nagendra Prasadआयकर अपील सं./ I.T.A. Nos.512 &513 /Mds/2015 ("नधा"रण वष" / Assessment Year : 2010-2011 & 2011- 2012)

For Appellant: Shri. R. Sivaraman, AdvocateFor Respondent: Shri. N. Rengaraj, IRS, CIT
Section 14A

…h in the case of Siva Industries & Holding, Ltd. vs. ACIT reported in 54 SOT 49 Chennai(2012), held that even in a year, where no exempt 14A can be made. The Tribunal while delivering the order has followed the order, of the Delhi Special Bench reported in 121 ITD 318 in the case of Chem Invest Ltd. vs. ITO wherein it was held that disallowance u/s.14A can be made even in the year where no exempt income has been earned or received by the assessee. The High Court of Bombay in the case of M/s. Godrej & Boyce. Mfg. Co. Ltd. vs CIT reported in 328 ITR 81 held that the AO is duty bound to determine the expenditu…

ACIT, Chennai vs. Inautix Technologies India Private Limited, Chennai

In the result, the assessee appeal is partly allowed

ITA 2625/CHNY/2014[2008-09]Status: DisposedITAT Chennai19 Jun 2015AY 2008-09

Bench: Shri Chandra Poojari & Shri Challa Nagendra Prasadआयकर अपील सं./ I.T.A. No.2277/Mds/2014 ("नधा"रण वष" / Assessment Year : 2008-2009)

For Appellant: Dr. Anitha Sumanth, Advocate
Section 10(34)Section 115JSection 14A

…so earned may be less or nil. Therefore, the disallowance to be computed should always be with reference to the investments made in such activity and the effort made therein, as held by Special Bench of ITAT Delhi in the case of Cheminvest Ltd. v. ITO [2009] (121 ITD 318)(Del)(SB) / (124 ITJ 577)(Del) (SB), wherein it was held as under: Cheminvest Ltd. v. ITO [2009) (121 ITD 318)(Del)(SB) Section 14A, read with section 10(34), of the Income-tax Act, 1961 - Expenditure incurred in relation to income not includible in total income - Assessment year 2004-05 - Whether since dividend income is exempted from tax by vi…

Inautix Technologies India Private Limited, Chennai vs. ACIT, Chennai

In the result, the assessee appeal is partly allowed

ITA 2277/CHNY/2014[2008-09]Status: DisposedITAT Chennai19 Jun 2015AY 2008-09

Bench: Shri Chandra Poojari & Shri Challa Nagendra Prasadआयकर अपील सं./ I.T.A. No.2277/Mds/2014 ("नधा"रण वष" / Assessment Year : 2008-2009)

For Appellant: Dr. Anitha Sumanth, Advocate
Section 10(34)Section 115JSection 14A

…so earned may be less or nil. Therefore, the disallowance to be computed should always be with reference to the investments made in such activity and the effort made therein, as held by Special Bench of ITAT Delhi in the case of Cheminvest Ltd. v. ITO [2009] (121 ITD 318)(Del)(SB) / (124 ITJ 577)(Del) (SB), wherein it was held as under: Cheminvest Ltd. v. ITO [2009) (121 ITD 318)(Del)(SB) Section 14A, read with section 10(34), of the Income-tax Act, 1961 - Expenditure incurred in relation to income not includible in total income - Assessment year 2004-05 - Whether since dividend income is exempted from tax by vi…

M/S Chaitanya Properties Private Limited, Bangalore vs. JCIT, Bangalore

ITA 52/BANG/2013[2009-10]Status: DisposedITAT Bangalore27 Mar 2015AY 2009-10

Bench: Shri Rajpal Yadav & Shri Jason P. Boaz

For Appellant: Shri V. Chandrashekar, AdvocateFor Respondent: Shri Farhat Hussain Qureshi, CIT (D.R)
Section 143(1)Section 143(3)Section 14ASection 234BSection 41(1)

…e provisions of section 14A of the Act in accordance with law and also that in view of the applicability of the provisions of Rule 8D and the judicial pronouncements in the case of – (i) Technopark Advises (P) Ltd., 18Taxman.com 146 (Del), and (ii) Cheminvest 121 ITD 318 (Del)(SB), he confirmed the entire disallowance of Rs.1,93,730. 6.3.1 In the proceedings before us, the learned Authorised Representative submitted that the Assessing Officer has not rendered any correct or cogent reasons for rejecting the assessee's contention that it has not incurred any expenditure to earn the exempt income of Rs.18,400 and ha…

DCIT vs. M/S Chaitanya Properties Pvt. Ltd

ITA 125/BANG/2013[2009-10]Status: DisposedITAT Bangalore27 Mar 2015AY 2009-10

Bench: Shri Rajpal Yadav & Shri Jason P. Boaz

For Appellant: Shri V. Chandrashekar, AdvocateFor Respondent: Shri Farhat Hussain Qureshi, CIT (D.R)
Section 143(1)Section 143(3)Section 14ASection 234BSection 41(1)

…e provisions of section 14A of the Act in accordance with law and also that in view of the applicability of the provisions of Rule 8D and the judicial pronouncements in the case of – (i) Technopark Advises (P) Ltd., 18Taxman.com 146 (Del), and (ii) Cheminvest 121 ITD 318 (Del)(SB), he confirmed the entire disallowance of Rs.1,93,730. 6.3.1 In the proceedings before us, the learned Authorised Representative submitted that the Assessing Officer has not rendered any correct or cogent reasons for rejecting the assessee's contention that it has not incurred any expenditure to earn the exempt income of Rs.18,400 and ha…