The Tax Publishers2020 TaxPub(DT) 4309 (Mum-Trib)

INCOME TAX ACT, 1961

Section 14A

When there is no exempt income earned by the assessee, no disallowance under section 14A can be made.

Disallowance under section 14A - Expenditure against exempt income - Assessee did not earn any exempt income -

Issue was as regards validity of disallowance made under section 14A read with rule 8D. Held: Assessee did not earn any exempt income and also there was no dispute that the assessee did not make any claim for exemption. When there is no exempt income earned by the assessee, no disallowance under section 14A can be made is no longer res integra.

Followed:Pr. CIT v. Ballarpur Industries Ltd. [Income Tax Appeal No. 51 of 2016, dt. 13-10-2016], CIT v. Winsome Textile Industries Ltd. (2009) 319 ITR 204 (P&H) : 2009 TaxPub(DT) 2012 (P&H-HC) and Asstt. CIT v. Vireet Investment (P.) Ltd. (2017) 82 Taxmann.com 415 (Del-Trib.) (SB) : 2017 TaxPub(DT) 1760 (Del-Trib).

REFERRED : Pr. CIT v. Huntsman International (India) (P) Ltd. [Income Tax Appeal No. 1619 of 2016, dt. 30-1-2019], Pr. CIT v. Rivian International (P) Ltd. 2017 TaxPub(DT) 5327 (Bom-HC), CIT v. Holcim India (P.) Ltd. (2014) 272 CTR 282 (Del) : 2014 TaxPub(DT) 3780 (Del-HC), CIT v. Shivam Motors (P) Ltd. 2014 TaxPub(DT) 4333 (All-HC), CIT v. Reliance Utilities & Power Ltd. (2009) 313 ITR 340 (Bom-HC) : 2009 TaxPub(DT) 1275 (Bom-HC), ITO v. RBK Share Broking (P) Ltd. (ITA No. 7546/Mum/2011 & ITA No. 6678/Mum/2011) : 2013 TaxPub(DT) 2652 (Mum-Trib) and CIT v. Chettinad Logistics (P) Ltd. 2018 TaxPub(DT) 4126 (SC).

FAVOUR : In assessee's favour.

A.Y. : 2008-09 & 2010-11



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