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 367,154 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

Pdr Investments Pvt Ltd, Chennai vs. DCIT, Corp Cir-5(2), Chennai

In the result, the appeal filed by the assessee is allowed

ITA 3187/CHNY/2018[2013-14]Status: DisposedITAT Chennai31 Dec 2019AY 2013-14

Bench: Shri Inturi Rama Rao & Shri Duvvuru Rl Reddyआयकर अपील सं./I.T.A. No. 3187/Chny/2018 िनधा"रण वष"/Assessment Year: 2013-14 M/S. Pdr Investments Pvt. Ltd., The Deputy Commissioner Of 37, Lakshmi Bhavan, Thousand Lights, Vs. Income Tax, Chennai 600 006. Corporate Circle 5(2), Chennai 600 034. [Pan:Aaccp1177A ] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri R. Vijayaraghavan, Advocate ""थ" की ओर से/Respondent By : Shri Ar.V. Sreenivasan, Jcit सुनवाई की तारीख/ Date Of Hearing : 09.12.2019 घोषणा की तारीख /Date Of Pronouncement : 31.12.2019 आदेश /O R D E R Per Duvvuru Rl Reddy: This Appeal Filed By The Assessee Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 3, Chennai, Dated 28.09.2018 For The Assessment Year 2013-14 Passed Under Section 271(1)(C) Of The Income Tax Act, 1961 [“Act” In Short] In Levying Penalty Of ₹.87,26,857/-.

For Appellant: Shri R. Vijayaraghavan, AdvocateFor Respondent: Shri AR.V. Sreenivasan, JCIT
Section 10(34)Section 14ASection 271(1)(c)

…e company is solely engaged in the business of making investment in shares and as all the expenses of the company are incurred only towards earning income from such shares which is exempt, by following the decision in the case of Chem invest Ltd v. ITO (2009) 121 ITD 318 (Delhi)(SB) and Circular No.5 of 2014 dated 11.02.2014 issued by the CBDT, the Assessing Officer disallowed the entire interest expenditure of ₹.2,89,13,152/- under section 14A r.w. Rule 8D and brought to tax. 3. For furnishing inaccurate particulars of taxable income, penalty proceedings under section 271(1)(c) of the Act. After considering the…

ACIT, New Delhi vs. M/S. International Hospital Ltd., New Delhi

In the result, the appeal of the Revenue in ITA No

ITA 1359/DEL/2017[2011-12]Status: DisposedITAT Delhi10 Dec 2019AY 2011-12

Bench: Shri N.K. Billaiya & Shri Kuldip Singh[A.Y 2011-12]

For Appellant: Shri R.M.Mehta, CAFor Respondent: Ms. Sushma Singh, Sr. DR
Section 14A

…the assessee and was of the firm belief that the provisions of section 14A of the Act r.w.r. 8D of the Rules squarely apply on the facts of the case. 6. Drawing support from the decision of the Special Bench of the Tribunal in the case of M/s Cheminvest Ltd 317 ITR 86 [AT], the Assessing Officer computed the disallowance and made addition of Rs. 13,65,85,862/-. 7. The assessee agitated the matter before the ld. CIT(A) and vehemently contended that since there was no exempt income earned by the assessee during the year, there is no question of any disallowance u/s 14A of the Act. 8. After considering the fac…

ITO, New Delhi vs. M/S. Pushpanjli Fincon Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 2216/DEL/2017[2012-13]Status: DisposedITAT Delhi01 Oct 2019AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Smt. Sulekha Verma, CIT-D.RFor Respondent: Shri Gautam Jain, Adv
Section 143(3)Section 14ASection 36Section 57

…is used for the purpose of investment. As such the claim of the assessee that no expense was incurred for earning exempt income is without any basis. There was no dividend earned by the assessee. Delhi Special Bench of the ITAT in Cheminvest Ltd. v ITO (2009) 121 ITD 318 (Del) (SB) took a view that when the expenditure is incurred in relation to exempt income, it has to suffer disallowance irrespective of the fact whether any exempt income is earned by the assessee or not. Total disallowance of Rs. 25,30,80,822/- is made u/s. 14A of the I.T Act. This is notwithstanding the grounds taken for the disallowance of in…

DCIT (Ltu), New Delhi vs. M/S. Rasandik Engineering Industries India Ltd., New Delhi

In the result, the appeal of the assessee in ITA No

ITA 1526/DEL/2013[2009-10]Status: DisposedITAT Delhi20 Sept 2019AY 2009-10

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble

For Appellant: Shri Sanjay Agarwal, CAFor Respondent: Shri Surender Pal, Sr. DR
Section 14A

…1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘F’ BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No. 1158/DEL/2013 [A.Y 2009-10] M/s Rasandik Engineering Industries I. Ltd Vs. The A.C.I.T C – 4 & 5, First Floor, C Block Large Taxpayer Unit Commercial Complex, Paschimi Marg New Delhi Vasant Vihar, New Delhi PAN: AAACR 3381 A ITA No. 1526/DEL/2013 [A.Y 2009-10] The A.C.I.T Vs M/s Rasandik Engineering Industries I. Ltd Large Taxpayer Unit C – 4 & 5, First Floor, C Block New Delhi Commercial Complex, Paschimi Marg Vasant Vihar, New Delhi PAN: AAACR 3…

M/S Rasandik Enginnering Industries India Ltd., New Delhi vs. ACIT, New Delhi

In the result, the appeal of the assessee in ITA No

ITA 1158/DEL/2013[2009-10]Status: DisposedITAT Delhi20 Sept 2019AY 2009-10

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble

For Appellant: Shri Sanjay Agarwal, CAFor Respondent: Shri Surender Pal, Sr. DR
Section 14A

…1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘F’ BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No. 1158/DEL/2013 [A.Y 2009-10] M/s Rasandik Engineering Industries I. Ltd Vs. The A.C.I.T C – 4 & 5, First Floor, C Block Large Taxpayer Unit Commercial Complex, Paschimi Marg New Delhi Vasant Vihar, New Delhi PAN: AAACR 3381 A ITA No. 1526/DEL/2013 [A.Y 2009-10] The A.C.I.T Vs M/s Rasandik Engineering Industries I. Ltd Large Taxpayer Unit C – 4 & 5, First Floor, C Block New Delhi Commercial Complex, Paschimi Marg Vasant Vihar, New Delhi PAN: AAACR 3…

M/S. Lakhani Rubber Udyog (Pvt) Ltd., New Delhi vs. ACIT, Faridabad

In the result, the appeal of the assessee in ITA No

ITA 4124/DEL/2016[2012-13]Status: DisposedITAT Delhi18 Sept 2019AY 2012-13

Bench: Shri N.K. Billaiya & Shri Kuldip Singh[A.Y 2012-13]

For Appellant: NoneFor Respondent: Shri Vijay Kumar Chadha Sr. DR
Section 14A

…ed by the assessee during the year, there cannot be any disallowance u/s 14A r.w.r 8D. This issue is by now well settled in favour of the assessee and against the revenue by the decision of the Special Bench of the Tribunal in the case of M/s Cheminvest Ltd 121 ITD 318 which was affirmed by the Hon'ble High Court of Delhi. Same view is taken by the Hon'ble Gujarat High Court in the case of Corrtech Energy (P) Ltd 372 ITR 97. In view of the above, the impugned disallowance is directed to be deleted. Accordingly, the Ground raised by the assessee is allowed. 9. In the result, the appeal of the assessee in ITA…

The Deputy Commissioner of Income Tax, Circle-3, Guwahati vs. M/S. Numaligarh Refinery Ltd., Guwahati

In the result, appeals of the assessee in I

ITA 278/GTY/2018[2015-16]Status: DisposedITAT Guwahati13 Sept 2019AY 2015-16

Bench: Shri S.S. Godara, Jm & Dr. A.L. Saini, Am Assessee`S Appeals

For Appellant: Shri Jayanta Dutta, ARFor Respondent: Shri Sanjay Sarma, DR
Section 80

…sideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that Special Bench of ITAT in the case of Cheminvest Ltd. Vs CIT 121 ITD 318 (Delhi) (SB) held that the disallowance u/s 14A of the Act can be made even in the year where there is no exempt income earned or received by the assessee. The decision of the Special Bench on which the CIT(A) placed reliance has since been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi), wherein…

Deputy Commissioner of Income Tax, Circle - 03, Guwahati vs. Numaligarh Refinery Limited, Guwahati

In the result, appeals of the assessee in I

ITA 28/GTY/2017[2013-14]Status: DisposedITAT Guwahati13 Sept 2019AY 2013-14

Bench: Shri S.S. Godara, Jm & Dr. A.L. Saini, Am Assessee`S Appeals

For Appellant: Shri Jayanta Dutta, ARFor Respondent: Shri Sanjay Sarma, DR
Section 80

…sideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that Special Bench of ITAT in the case of Cheminvest Ltd. Vs CIT 121 ITD 318 (Delhi) (SB) held that the disallowance u/s 14A of the Act can be made even in the year where there is no exempt income earned or received by the assessee. The decision of the Special Bench on which the CIT(A) placed reliance has since been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi), wherein…

Numaligarh Refinery Limited, Guwahati vs. Deputy Commissioner of Income Tax, Circle - 03, Guwahati

In the result, appeals of the assessee in I

ITA 27/GTY/2017[2013-14]Status: DisposedITAT Guwahati13 Sept 2019AY 2013-14

Bench: Shri S.S. Godara, Jm & Dr. A.L. Saini, Am Assessee`S Appeals

For Appellant: Shri Jayanta Dutta, ARFor Respondent: Shri Sanjay Sarma, DR
Section 80

…sideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that Special Bench of ITAT in the case of Cheminvest Ltd. Vs CIT 121 ITD 318 (Delhi) (SB) held that the disallowance u/s 14A of the Act can be made even in the year where there is no exempt income earned or received by the assessee. The decision of the Special Bench on which the CIT(A) placed reliance has since been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi), wherein…

The Deputy Commissioner of Income Tax, Circle-3, Guwahati vs. M/S. Numaligarh Refinery Ltd., Guwahati

In the result, appeals of the assessee in I

ITA 98/GTY/2016[2012-13]Status: DisposedITAT Guwahati13 Sept 2019AY 2012-13

Bench: Shri S.S. Godara, Jm & Dr. A.L. Saini, Am Assessee`S Appeals

For Appellant: Shri Jayanta Dutta, ARFor Respondent: Shri Sanjay Sarma, DR
Section 80

…sideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that Special Bench of ITAT in the case of Cheminvest Ltd. Vs CIT 121 ITD 318 (Delhi) (SB) held that the disallowance u/s 14A of the Act can be made even in the year where there is no exempt income earned or received by the assessee. The decision of the Special Bench on which the CIT(A) placed reliance has since been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi), wherein…

The Deputy Commissioner of Income Tax, Circle-3, Guwahati vs. M/S. Numaligarh Refinery Ltd., Guwahati

In the result, appeals of the assessee in I

ITA 97/GTY/2016[2011-12]Status: DisposedITAT Guwahati13 Sept 2019AY 2011-12

Bench: Shri S.S. Godara, Jm & Dr. A.L. Saini, Am Assessee`S Appeals

For Appellant: Shri Jayanta Dutta, ARFor Respondent: Shri Sanjay Sarma, DR
Section 80

…sideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that Special Bench of ITAT in the case of Cheminvest Ltd. Vs CIT 121 ITD 318 (Delhi) (SB) held that the disallowance u/s 14A of the Act can be made even in the year where there is no exempt income earned or received by the assessee. The decision of the Special Bench on which the CIT(A) placed reliance has since been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi), wherein…

M/S. Numaligarh Refinery Ltd., Guwahati vs. The Deputy Commissioner of Income Tax, Circle-3, Guwahati

In the result, appeals of the assessee in I

ITA 90/GTY/2016[2012-13]Status: DisposedITAT Guwahati13 Sept 2019AY 2012-13

Bench: Shri S.S. Godara, Jm & Dr. A.L. Saini, Am Assessee`S Appeals

For Appellant: Shri Jayanta Dutta, ARFor Respondent: Shri Sanjay Sarma, DR
Section 80

…sideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that Special Bench of ITAT in the case of Cheminvest Ltd. Vs CIT 121 ITD 318 (Delhi) (SB) held that the disallowance u/s 14A of the Act can be made even in the year where there is no exempt income earned or received by the assessee. The decision of the Special Bench on which the CIT(A) placed reliance has since been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi), wherein…

M/S. Numaligarh Refinery Ltd., Guwahati vs. The Deputy Commissioner of Income Tax, Circle-3, Guwahati

In the result, appeals of the assessee in I

ITA 89/GTY/2016[2010-11]Status: DisposedITAT Guwahati13 Sept 2019AY 2010-11

Bench: Shri S.S. Godara, Jm & Dr. A.L. Saini, Am Assessee`S Appeals

For Appellant: Shri Jayanta Dutta, ARFor Respondent: Shri Sanjay Sarma, DR
Section 80

…sideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that Special Bench of ITAT in the case of Cheminvest Ltd. Vs CIT 121 ITD 318 (Delhi) (SB) held that the disallowance u/s 14A of the Act can be made even in the year where there is no exempt income earned or received by the assessee. The decision of the Special Bench on which the CIT(A) placed reliance has since been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi), wherein…

M/S. Numaligarh Refinery Ltd., Guwahati vs. The Deputy Commissioner of Income Tax, Circle-3, Guwahati

In the result, appeals of the assessee in I

ITA 8/GTY/2014[2010-11]Status: DisposedITAT Guwahati13 Sept 2019AY 2010-11

Bench: Shri S.S. Godara, Jm & Dr. A.L. Saini, Am Assessee`S Appeals

For Appellant: Shri Jayanta Dutta, ARFor Respondent: Shri Sanjay Sarma, DR
Section 80

…sideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that Special Bench of ITAT in the case of Cheminvest Ltd. Vs CIT 121 ITD 318 (Delhi) (SB) held that the disallowance u/s 14A of the Act can be made even in the year where there is no exempt income earned or received by the assessee. The decision of the Special Bench on which the CIT(A) placed reliance has since been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi), wherein…

M/S. Numaligarh Refinery Ltd., Guwahati vs. The Deputy Commissioner of Income Tax, Circle-3, Guwahati

In the result, appeals of the assessee in I

ITA 7/GTY/2014[2009-10]Status: DisposedITAT Guwahati13 Sept 2019AY 2009-10

Bench: Shri S.S. Godara, Jm & Dr. A.L. Saini, Am Assessee`S Appeals

For Appellant: Shri Jayanta Dutta, ARFor Respondent: Shri Sanjay Sarma, DR
Section 80

…sideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that Special Bench of ITAT in the case of Cheminvest Ltd. Vs CIT 121 ITD 318 (Delhi) (SB) held that the disallowance u/s 14A of the Act can be made even in the year where there is no exempt income earned or received by the assessee. The decision of the Special Bench on which the CIT(A) placed reliance has since been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi), wherein…

M/S. Numaligarh Refinery Ltd., Guwahati vs. The Deputy Commissioner of Income Tax, Circle-3, Guwahati

In the result, appeals of the assessee in I

ITA 5/GTY/2014[2007-08]Status: DisposedITAT Guwahati13 Sept 2019AY 2007-08

Bench: Shri S.S. Godara, Jm & Dr. A.L. Saini, Am Assessee`S Appeals

For Appellant: Shri Jayanta Dutta, ARFor Respondent: Shri Sanjay Sarma, DR
Section 80

…sideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that Special Bench of ITAT in the case of Cheminvest Ltd. Vs CIT 121 ITD 318 (Delhi) (SB) held that the disallowance u/s 14A of the Act can be made even in the year where there is no exempt income earned or received by the assessee. The decision of the Special Bench on which the CIT(A) placed reliance has since been reversed by the Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs CIT 317 ITD 33 (Delhi), wherein…

Dy. Commissioner of Income Tax-6, Kanpur vs. Commercial Engineers & Body Builders Co. Ltd., Kanpur

In the result, both the appeals of the Revenue are dismissed

ITA 658/LKW/2018[2014-15]Status: DisposedITAT Lucknow19 Jul 2019AY 2014-15

Bench: Shri. A. D. Jain & Shri T. S. Kapoor

For Appellant: Shri S. K. Maduk, CIT (DR)For Respondent: Shri B. L. Gupta, FCA
Section 143(3)Section 14ASection 32(1)(iia)

…ture incurred and the income not forming part of total income then disallowance would be justified even where there is no receipt of exempted income u/s 10 in the year under consideration in view of the decision of Special Bench in the case of Cheminvest Ltd. 124 TTJ 577 (Del)(SB). ITA No.657 & 658/LKW/2018 Page 18 of 24 17. The basic principle of taxation is to tax the net income. On the same analogy, the exemption is also to be allowed on net basis i.e. gross receipts minus related expenses. Therefore, if any expenditure is directly related to exempted income, it cannot be allowed to be set off against taxab…

Dy. Commissioner of Income Tax-6, Kanpur vs. Commercial Engineers & Body Builders Co. Ltd., Kanpur

In the result, both the appeals of the Revenue are dismissed

ITA 657/LKW/2018[2013-14]Status: DisposedITAT Lucknow19 Jul 2019AY 2013-14

Bench: Shri. A. D. Jain & Shri T. S. Kapoor

For Appellant: Shri S. K. Maduk, CIT (DR)For Respondent: Shri B. L. Gupta, FCA
Section 143(3)Section 14ASection 32(1)(iia)

…ture incurred and the income not forming part of total income then disallowance would be justified even where there is no receipt of exempted income u/s 10 in the year under consideration in view of the decision of Special Bench in the case of Cheminvest Ltd. 124 TTJ 577 (Del)(SB). ITA No.657 & 658/LKW/2018 Page 18 of 24 17. The basic principle of taxation is to tax the net income. On the same analogy, the exemption is also to be allowed on net basis i.e. gross receipts minus related expenses. Therefore, if any expenditure is directly related to exempted income, it cannot be allowed to be set off against taxab…

DCIT, New Delhi vs. M/S. Oscar Investment Ltd., New Delhi

In the result, the appeal of the revenue in ITA No

ITA 29/DEL/2017[2013-14]Status: DisposedITAT Delhi04 Jul 2019AY 2013-14

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble[A.Y 2013-14]

For Appellant: Shri Tarandeep Singh, AdvFor Respondent: Ms. Rinku Singh, Sr. DR
Section 14A

…by the assessee. This admitted fact makes the impugned issue squarely in favour of the assessee and against the revenue by the decision of the Hon'ble Jurisdictional High Court decision of the Special Bench of the Tribunal in the case of M/s Cheminvest Ltd 121 ITD 318 which was affirmed by the Hon'ble High Court of Delhi. Same view is taken by the Hon'ble Gujarat High Court in the case of Corrtech Energy (P) Ltd 372 ITR 97. In view of the above, disallowance of Rs. 4,45,79,607/- is directed to be deleted. Accordingly, the Ground raised by the revenue is dismissed. 4. In the result, the appeal of the reven…

DCIT, Karnal vs. M/S. Mahesh Timber Pvt. Ltd., Karnal

In the result, the appeal of the revenue in ITA No

ITA 1514/DEL/2017[2012-13]Status: DisposedITAT Delhi04 Jul 2019AY 2012-13

Bench: Shri N.K. Billaiya & Ms. Suchitra Kamble

For Appellant: Shri Ashish Goel, CAFor Respondent: Ms. Rinku Singh, Sr. DR
Section 14A

…exempt income earned by the assessee, there cannot be any disallowance u/s 14A r.w.r 8D. This issue is by now well settled in favour of the assessee and against the revenue by the decision of the Special Bench of the Tribunal in the case of M/s Cheminvest Ltd 121 ITD 318 which was affirmed by the Hon'ble High Court of Delhi. Same view is taken by the Hon'ble Gujarat High Court in the case of Corrtech Energy (P) Ltd 372 ITR 97. In view of the above, disallowance of Rs. 73,46,890/- is directed to be deleted. Accordingly, the Ground raised by the revenue is dismissed whereas Ground No. 2 of the assessee in the cross…