9911796707
TMI Blog2019 (5) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the assessee has neither earned nor claimed any exempt income, the disallowance of Rs. 3,94,955/- u/s. 14A of the Income-tax Act, 1961 (hereinafter referred to as the "Act") read with Rule 8D of the Income-tax Rules, 1962 (hereinafter referred to as the "Rules") made by AO and confirmed by Ld. CIT(A) is erroneous. 3. The only question that has been poised before us is as to whether any disallowance u/s. 14A read with Rule 8D can be made by the AO/Ld. CIT(A) when the assessee has not earned any exempt income. According to assessee, the assessee had not earned any dividend income. However, the AO taking note that assessee has invested in unquoted equity shares and taking note of Circular no. 5 of 2014 issued by the CBDT, the AO was of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made irrespective of earning or not of any exempt income, I note that this contention of the Revenue is no longer res integra and has been dealt with by the Hon'ble Punjab & Haryana High Court in the case of Pr. CIT-1, Chandigarh Vs. Vardhman Chemtech (P) Ltd. (2019) 102 taxmann.com 132 (P&H), wherein their Lordships held as under: "10. We now advert to the judicial decisions relied upon by the learned counsel for the assessee. In Ratan Melting & Wire Industries' case (supra), it was held by the Supreme Court that 'circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot override the express provisions of Section 14A read with Rule 8 D of the 1962 Rules. In Cheminvest Ltd. 's case (supra), it was reiterated that Section 14A of the Act envisages that there should be an actual receipt of income, which is not includable in the total income during the relevant previous year for purpose of disallowing any expenditure under Section 14A of the Act in relation to said income." 5. Therefore, respectfully taking note of the aforesaid ratio decidendi of the Hon'ble High Court, cited supra, I find no merit in the contention of the Ld. DR that in the light of the CBDT Circular No. 5 of 2014 disallowance u/s. 14A of the Act is mandatory irrespective of the fact whether the assessee earns exempt income or not. S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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