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TMI Blog2018 (9) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer observed that the assessee has not shown any amount in column 17(L) of the audit report as amount disallowable u/s.14A. In the balance sheet of the assessee, it is seen that the assessee has shown investment of Rs. 10,67,74,909/- which were the same in the preceding year also. Therefore, he made disallowance u/s.14A of the Act r.w. 8D of IT Rules, 1962 of Rs. 56,95,726/-. 4. On appeal before the CIT(A), the assessee argued that the provisions of section 14A are not applicable to the assessee as during the year under consideration, the assessee has not claimed any exempt income u/s.10(34) of the Act. 5. The CIT(A) did not accept the submission of the assessee on the ground that even if no exempt income has been earned during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd (supra) submitted that no disallowance of expenditure u/s.14A of the Act can be made where no exempt was earned by the assessee. 11. Ld D.R. has supported the orders of lower authorities. 12. Now it is settled position of law that whenever assessee did not earn any exempt income, no disallowance could be made u/s. 14A of the Act. The Hon'ble Delhi High Court in the case of Cheminvest Ltd. v. CIT, 378 ITR 33 (Del) has categorically held that section 14A envisages that there should be actual receipt of income which was not includible in the total income during the relevant previous year for the purpose of disallowing any expenditure in relation to the said income. Wherever there is no exempt income includible in the total income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 223 Taxmann 130 (Guj) ; [2015] 372 ITR 97 (Guj) and the third of the Allahabad High Court in CIT v. Shivam Motors (P) Ltd. (decision dated 5th May, 2014, in I . T. A. No. 88 of ITA No. 1107/Bang/2016 2014). These three decisions reiterated the position that when an assessee had not earned any taxable income in the relevant assessment year in question "corresponding expenditure could not be worked out for dis allowance." 13. As it is not in dispute that the assessee has not earned any exempt income during the year, therefore, we respectfully following the above quoted decision of Hon'ble Delhi High Court, set aside the orders of lower authorities and delete the disallowance of expenditure of Rs. 56,95,726/- and allow the ground of appeal o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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