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2019 (4) TMI 1018 - AT - Income TaxDisallowance u/s.14A - assessee had not earned any exempt income during the relevant assessment year - A.Y 2012- 13 - HELD THAT:- Admittedly, the assessee during the year under consideration had not earned any dividend income. Insofar the contention of the ld. A.R that in the absence of any dividend income earned by the assessee during the year no disallowance under Sec.14A could have been made, we are persuaded to subscribe to the same. In our considered view as the assessee had not earned any exempt income during the year under consideration, therefore, no disallowance under Sec.14A could have been made in its hands. See CHEMINVEST LIMITED VERSUS COMMISSIONER OF INCOME TAX-VI [2015 (9) TMI 238 - DELHI HIGH COURT] and COMMISSIONER OF INCOME TAX-IV VERSUS HOLCIM INDIA P. LTD. [2014 (9) TMI 434 - DELHI HIGH COURT] As in the case of Tata Industries Ltd. Vs. ITO, Ward 2(3)(3), Mumbai [2016 (7) TMI 1011 - ITAT MUMBAI] had observed that the disallowance under Sec.14A cannot exceed the tax exempt income earned by an assessee during the year. We thus in the backdrop of the fact that the assessee during the year under consideration had not received any dividend income, respectfully follow the view taken in the aforementioned judicial pronouncements and vacate the disallowance made by the A.O under Sec. 14A as had been sustained by the CIT(A). - Decided in favour of assessee Addition u/s 14A - AY. 2013-14 - HELD THAT:- Whether the assessee had received any dividend income during the year under consideration is not discernible from the orders of the lower authorities. As such, in our considered view the matter in all fairness requires to be restored to the file of the A.O for fresh adjudication as per the extant law. Insofar the working of the disallowance under Sec. 14A in respect of the exempt dividend income is concerned, the A.O in the course of the set aside proceedings after verifying the amount of dividend income received by the assessee during the year shall restrict the disallowance to the extent of such exempt dividend income.
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