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2018 (5) TMI 141 - AT - Income TaxDisallowance u/s 14A - Held that:- In absence of any tax free income earned by the assessee, disallowance u/s 14A could not be made. In a similar vein, it has been held in Cheminvest Ltd. v. CIT (2015 (9) TMI 238 - DELHI HIGH COURT) that section 14A will not apply if no exempt income is received or receivable during the relevant previous year. In CIT vs. Chettinad Logistics (P) Ltd. (2017 (4) TMI 298 - MADRAS HIGH COURT) has held that section 14A cannot be invoked where no exempt income was earned by the assessee in the relevant assessment year. Allowability of business expenses - Held that:- In the instant case, the assessee failed to file before the AO evidence to substantiate the allowability of the above expenses. The assessee also failed to establish that these expenses were incurred wholly and exclusively for the business purpose. As mentioned hereinbefore at para 10, the Ld. CIT(A), having examined (i) the addition made by the AO, (ii) addition confirmed by the CIT(A), (iii) addition confirmed by the ITAT for AYs 2006-07, 2007-08, 2008-09 and 2009-10 has confirmed a disallowance of ₹ 12,44,930/- (Rs.29,96,221/- minus ₹ 12,44,930/-). Thus the Ld. CIT(A) has given a relief of ₹ 17,51,291/-. As the above order of the Ld. CIT(A) is based on a comparative analysis being contextual, we confirm the same and uphold the disallowance of ₹ 12,44,930/-. Accordingly, the above grounds of appeal are dismissed.
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