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TMI Blog2017 (5) TMI 1603X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee against the order of Commissioner of Income Tax (Appeals)- 5, Mumbai, dated 02.03.2015for A.Y. 2010-11. The grounds of appeal are mentioned herein below:- 1. On the facts and in the circumstances of the case and in law the Ld. CIT(a) erred in invoking the provisions of section 14A of the I.T. Act inspite of the fact that the appellant had not received any exempt income during the year. 2. The Appellant company craves leave to add to amend, alter or modify any or all the aforesaid grounds of appeal. Ground No.1 2. This ground raised by the assessee is with regard to the action of Ld. CIT(A) in upholding the order of AO in invoking the provisions of section 14A of the I.T. Act inspite of the fact that the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther hand, Ld. DR relied upon the order passed by revenue authorities. 5. We have heard the counsels for both the parties and also perused the orders passed by revenue authorities, we find that Ld. CIT(A) has dealt with this ground in para no. 4.1.1 of its order and the same is reproduced below:- The issue is considered. It is noted that in Cheminvest Ltd. vs ITO (2009) 121 ITD 318 (Delhi ITAT)(SB), the Hon'bte ITAT 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 during the year or not. In coming to this conclusion, the special Bench had retied onto the decision of the Hon'bie Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance u/s 14A, even if the assessee had not earned any exempt income during the year. Accordingly, the addition on account of disallowance of ₹ 58,32,506/- is confirmed. After analyzing the aforementioned order passed by Ld. CIT(A), we find that Ld. CIT(A) has upheld the addition by referring to the circular passed by CBDT bearing No. 5/2014 dated 11.02.14. Whereas on the contrary, we have gone through the judgments referred and relied upon by Ld. AR wherein this issue has already been considered by different High Courts including jurisdictional High Court of Bombay (Nagpur Bench) in the case of Pr.CIT Vrs. Ballarpur Industries Ltd. ITA No. 51 of 2016 wherein it has been held that "By this income tax appeal the appellant-Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law. Since no substantial question of law arises in this income tax appeal, the income tax appeal is dismissed with no order as to costs." 6. From the aforementioned judgments of jurisdictional High Court, it is clear that the provisions of section 14A of I.T. Act, 1961 would no apply if not exempted income was received during the relevant previous year. Since the facts of the present cae and the issue involved are identical with that of the judgment passed by the Hon'ble Bombay High Court. Therefore, respectfully following the decision of the jurisdictional High Court and in order to maintain judicial consistency which is applicable mutatis mutandis in the case of the assessee, we hold that since in the present case no exempt income has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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