2017 (4) TMI 1557

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..... that the assessee has not earned any dividend or any kind of exempt income during the year. Whence there is no exempt income claimed by the assessee, then the ratio laid down by the Hon ble Jurisdictional High Court in Cheminvest Ltd. vs. CIT ( 2015 (9) TMI 238 - DELHI HIGH COURT] that if the assessee has not earned any exempt income or when there is no actual receipt of any income which does not .....

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..... er to make disallowance under section 14A read with Rule 8D(2). 2. Because while confirming the disallowance the Ld. CIT (A) has grossly erred in confirming the disallowance ignoring that 'appellant' has no income which is claimed as exempt and therefore, legally no disallowance under section 14A is warranted. 3. Because application of section 14A read with Rule 8D (2) is not automatic .....

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..... rmed by Ld. CIT (A) being wrong, bad in law, un warranted deserves to be deleted." 2. The brief facts qua the issue of disallowance u/s 14A are that, the Assessing Officer noted that the assessee had made huge investment in shares; however it has not allocated any expenses for the purpose of disallowance u/s 14A. He further noted that the assessee has claimed interest expenses of ₹ 22,33,99 .....

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..... res; this itself warrants disallowance u/s 14A. 4. Before us the Learned Counsel submitted that now this issue stands covered by the decision of Hon'ble Jurisdictional High Court in the case of Cheminvest Ltd. vs. CIT (2015) 378 ITR 33 (Delhi), wherein the Hon'ble High Court has held that there should be an actual receipt of income which is not included in total income and when there is no exempt .....

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..... ciple laid down by the Hon'ble Jurisdictional High Court, hold no disallowance u/s 14A can made in this year, because, admittedly there is no exempt income earned by the assessee in this year. Thus, the disallowance as confirmed by the Learned CIT(Appeals) stands deleted. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 20.04.2017.
Case laws, Dec .....

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