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2021 (2) TMI 340 - MADRAS HIGH COURTAddition u/s 14A - Whether no exempt income received by assessee? - Whether the provisions of Section 14A is applicable for maintaining tax free portfolio/investments in the absence of tax-free/divident income from such investments? - HELD THAT:- Issue decided in M/S. CELEBRITY FASHION LTD., CHENNAI-45. [2020 (9) TMI 1022 - MADRAS HIGH COURT] to apply the provisions of Section 14A AO should have recorded a finding as to how Sub-Section (1) of Section 14A would stand attracted. In the absence of any such finding, the disallowance made was not justifiable. AO straightaway proceeded to the second limb of Section 14(2) which is impermissible. The Tribunal rightly took note of the decision in the case of Redington India Ltd. [2017 (1) TMI 318 - MADRAS HIGH COURT] wherein it was held that the provisions of Section 14A r.w.r 8D cannot be made applicable in vacuum i.e in the absence of exempt income. Therefore, we find that the Tribunal was right in deciding the issue against the Revenue and in favour of the assessee.
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