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2019 (11) TMI 1625 - AT - Income TaxDisallowance u/s. 14A r.w.s. 8D - case of the assessee that disallowance u/s 14A has been thus rightly restricted to the extent of exempt income - HELD THAT:- We find merit in the aforesaid plea of the assessee. Various Courts have held that Section 14A of the Act disallowance cannot be kicked when there was no exempt income earned by the assessee as is the case in the present appeals. Hon'ble Delhi High Court in PCIT vs. IL & FS Energy Development Company Ltd [2017 (8) TMI 732 - DELHI HIGH COURT] and M/S. CHETTINAD LOGISTICS PVT. LTD. [2017 (4) TMI 298 - MADRAS HIGH COURT] have expressed a clear disagreement with CBDT Circular and held that where there is no exempt income in relevant year there cannot be a disallowance of expenditure under S. 14A of the Act. Similar proposition has been laid down in the case or Corrtech Energy (P.) Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT]. Hence, in conformity with the judicial precedents, we find substantial merit in the conclusion drawn by the CIT(A) for limiting the disallowance to the extent of exempt income. Hence, we decline to interfere. Nature of expenditure - professional and legal fees - revenue or capital expenditure - HELD THAT:- The expenditure claimed by the assessee bears the revenue character. No error in the order of the CIT(A). Hence, the Ground No. 2 of the Revenue is dismissed. Disallowance towards belated employees' contribution to PF and ESIC u/s 36(1)(va) - HELD THAT:- CIT(A) has rightly concluded the issue against the assessee in the light of the decision in the case of Gujarat State Road Transport Corporation, 2014 (1) TMI 502 - GUJARAT HIGH COURT]
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