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TMI Blog2021 (6) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... shall take up the ITA No. 7128/Mum/2019 for the A.Y 2015-16 as a lead case and the facts narrated therein. The revenue has raised the following grounds of appeal: Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is justif ied in holding that no disallowance u/s 14A of the Act is called for as the assessee has not earned any exempt income during the year under consideration without appreciating the legal intent of introducing provisions of Sec. 14A of the Act by Finance Act 2001 as clarified by CBDT circular No. 5/2014 dated 11.02.2014. 2. The Brief facts of the case are that the assessee company is engaged in the business of entertainment, hospitality and property developers and filed the return of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal, submissions of the assessee and the Assessing officer findings. The appellate Authority on perusal of the facts and financial details found that the assessee company has made investments in associates and has not received any exempted income during the year. Whereas, the A.O. has made disallowance u/sec14A r.w.r 8D(2)(iii) irrespective of the facts on record that there is no exempt income received by the assessee. The Ld.CIT(A) relied on the judicial decisions and deleted the addition and allowed the assessee appeal. Aggrieved by the CIT(A) order the revenue has filed an appeal with the Honble Tribunal. 4. At the time of hearing none appeared on behalf of the assessee and Ld.DR has made the submissions. The Ld. DR submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of the appellate proceedings, it was submitted that the appellant had earned no exempt income during the year under consideration and therefore no disallowance could be made under Section 14A r.w.r. 8D of the Income Tax Act, 1961. 6.3 Reliance can be placed on the recent judgment of the Hon'ble Supreme Court in the case of PCIT vs. Oil Industry Development Board [2019] 262 Taxmann 102 [SC], wherein it is held that In the absence of any exempt income, disallowance u/ s 14A 86 Rule 8D of the Act of any amount is not permissible (Essar Teleholdings 401 ITR 445 (SC) followed, Cheminvest 378 ITR 33 (Del) approved) 6.4 Further rel iance was placed on following cases: a). The Bombay High Court in the case of PCIT vs. Balla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing any expenditure incurred in relation to the said income. The Income Tax Appellate Tribunal held that the provisions of Section 14A of the Income Tax Act, 1961 would not apply to the facts of this case as no exempt income was received or receivable during the relevant previous year. It is not the case of the Assessing Off icer that any actual income was received by the appellant and the same was includible in the total income. In the facts of the case, the Authorities held that since the investments made by the appellant in the sister concerns were not the actual income received by the appel lant, they could not have been included in the total income." 6.4.2 Further the Hon'ble Apex Court has dismissed the SLP filed by the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar vein, it has been held in Cheminvest Ltd. v. CIT [2015] 61 taxmann.com 1181284 Taxman 7611378 ITR 33 (Delhi) that section 14A will not apply if no exempt income is received or receivable during the relevant previous year." 6.4.5 The Hon'ble High Court of Delhi in Principal Commissioner of Income-tax-04 v. IL&FS Energy Development Company Ltd. [2017] 84 taxmann.com 186 delhi wherein it was held that where no exempt income wa earned in relevant assessment year, there could be no disallowance in terms of section 14A r.w.r 8D. 6.4.6 Jurisdictional ITAT Mumbai Bench "G" in Assistant I Commissioner of Income Tax, Mumbai v. Gini & Jony Ltd. [2018] 97 taxmann.com 401 (Mumbai - Trib. ) wherein it was held that where there was no exe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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