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2022 (7) TMI 485 - ITAT DELHIDisallowance u/s 14A - CIT(A) while deleting the addition made by the AO has noted that assessee has not earned any exempt income during the year under consideration - HELD THAT:- Revenue has not placed any material on record to demonstrate that the findings of the CIT(A) that assessee has not earned any exempt income is factually incorrect. We further find that CIT(A) while deleting the addition had relied on the decision of Jurisdictional High Court in the case of Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] AND IL & FS Energy Development [2017 (8) TMI 732 - DELHI HIGH COURT] As held that the expression "does not form part of the total income" in Section 14A of the envisages that there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year. As far as reliance placed by Revenue on CBDT Circular dated 11.02.2014 is concerned, we find that Hon'ble Delhi High Court in the case of IL & FS Energy Development Co. Ltd.(supra) has held that the CBDT Circular dated 11th May 2014 cannot override the expressed provisions of Section 14A read with Rule 8D. Further the decisions relied upon in written submissions made by Learned DR are not applicable to the present facts. Considering the totality of the aforesaid facts, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed.
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