2023 (9) TMI 1551 - AT - Income Tax

Disallowance u/s 14A - assessee has not earned any exempt income during the year - HELD THAT - We observe that in the case of PCIT vs. Era Infrastructure (India) Ltd. 2022 (7) TMI 1093 - DELHI HIGH COURT has held that no disallowance u/s 14A of the Act can be made if the assessee had not earned any exempt income during the year under consideration. Thus, respectfully following the same, we find that there is no exempt income earned by the assessee during the year and therefore, disallowance u/s 14A of the Act is uncalled for and accordingly, we set aside the finding of CIT(A) and deleted the addition u/s 14A - Ground no. 1 raised by the assessee is allowed.

Summary

The appeal was filed by the assessee for AY 2012-13 against the order passed by the ld. CIT(A) confirming a disallowance of Rs. 13,28,529 under section 14A of the Income Tax Act. The Tribunal found that the assessee did not earn any exempt income during the year, following a Delhi High Court ruling, and therefore deleted the disallowance. The appeal was allowed.