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TMI Blog2021 (9) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... w.r.8D of Income tax Rules on the ground that the assessee has not earned any exempt income during the relevant year, ignoring the CBDT Circular No.5/2014 dated 11.02.2014 which specifically clarifies that Rule 8D read with section 14A of the Income Tax Act, 1961 provides for disallowance of the expenditure even where the tax payer in a particular year has not earned any exempt income." 2. The only effective ground is against the deletion of disallowance of Rs. 2,94,81,452/- made by the Assessing Officer by invoking the provision of section 14A r.w.Rule 8D of the Income Tax Rules, 1962 ("the Rules"). 3. The facts in brief are that the case of the assessee was selected for scrutiny assessment and the assessment u/s 143(3) of the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cim India (P) Ltd [2015]57 taxmann.com 28 (Delhi) in ITA No. 486/2014 & ITA No. 299/2014 and Cheminvest Ltd. VS. CIT - VI (ITA 749/2014) 234 Taxman 761 (Del) decided on 02.09.2015, wherein disallowance cannot be made by invoking section 14A of the Act. 7. We have heard the rival contentions and perused the material available on record. We find that Ld.CIT(A) has deleted the addition made on account of disallowance u/s 14A of the Act, by observing as under:- "I have considered the submission of the appellant and observation of the AO made in the assessment order on the issue. The AO computed disallowance u/s 14A of the Act read with Rule 8D at Rs. 2,94,81,452/-. The Ld. AR has stated that since no dividend income was earned, the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. The disallowance of Rs. 2,94,81,452/- made by the Assessing Officer is, therefore, deleted." 8. The Revenue has not pointed out that during the year under appeal, the assessee has earned dividend income. Ld.CIT(A) has followed the decision of Hon'ble Jurisdictional High Court rendered in the cases of CIT vs. Holcim India (P) Ltd (supra) and Cheminvest Ltd. VS. CIT - VI (supra). The Revenue has not brought any other contrary binding precedents by the Hon'ble Jurisdictional High Court or Hon'ble Supreme Court to our notice. Therefore, we do not see any infirmity in the finding of Ld.CIT(A), the same is hereby affirmed. Thus, ground raised by the Revenue is rejected. 9. In the result, the appeal of the Revenue is dismissed. Above deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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