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2018 (1) TMI 509 - AT - Income TaxDisallowance u/s 14A r.w.Rule 8D - CIT-A deleted the addition - sufficiency of own funds - Held that - As perused the relevant material on record and find that this issue stands settled in favour of assessee by the Hon ble judicial High Court in the case of Cheminvest Ltd vs. CIT reported in (2015 (9) TMI 238 - DELHI HIGH COURT) wherein it has been held that if there is no exempt income, there can be no question of making any disallowance under section 14 A. Also see CIT vs. Holcim India Pvt. 2014 (9) TMI 434 - DELHI HIGH COURT - Decided in favor of assessee.
Issues:
1. Disallowance under section 14A read with Rule 8D of the Income Tax Act. Analysis: The Appellate Tribunal ITAT Delhi heard an appeal filed by the revenue against an order passed by Ld.CIT(A)-3 New Delhi for the assessment year 2011-12. The revenue challenged the deletion of an addition of ?91,52,780 made by the Assessing Officer (AO) on account of disallowance under section 14A read with Rule 8D of the Act. The Ld. CIT (A) had deleted this addition, prompting the revenue to appeal. The assessee had filed its return of income declaring total income of ?2,07,58,510. The AO observed that the assessee had made investments totaling ?22,59,32,106 during the relevant year. The sole issue raised by the revenue was regarding the deletion of the disallowance of ?91,52,780 under section 14A read with Rule 8D. The Ld. CIT (A) justified the deletion by pointing out that there was no exempt income during the year, citing decisions by various High Courts. The Tribunal noted that the issue had been settled in favor of the assessee by the Hon'ble judicial High Court in previous cases, emphasizing that if there is no exempt income, no disallowance under section 14A can be made. Relying on the binding precedents set by the High Courts, the Tribunal dismissed the revenue's appeal, stating that there was no infirmity in deleting the addition since there was no exempt income in the present case. As a result, the appeal filed by the revenue was dismissed, and the order was pronounced on 29th November 2017.
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