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2022 (2) TMI 812 - AT - Income TaxDisallowance of expenses u/s.14A r.w.r.8D - HELD THAT:- It is well established principle of law that if there is no exempt income for relevant assessment year, then there cannot be any disallowances of expenses relatable to exempt income u/s. 14A of the Act. This principle is supported by the decision in the case of CIT Vs. Chettinad Logistics Pvt. Ltd. [2018 (7) TMI 567 - SC ORDER] In this case, on perusal of the order passed by the Assessing Officer, there is no observation with regard to exempt income earned for relevant assessment year. Even before the learned CIT(A), although the assessee did not appear before the learned CIT(A), but the learned CIT(A) has disposed off appeal filed by the assessee on technical grounds for non-prosecution of appeal, without discussing issue of disallowance of expenses u/s. 14A of the Act. Therefore, considering facts & circumstances of this case, we are of the considered view that the issue needs to go back to the file of the Assessing Officer to reconsider the issue in light of our observations hereinabove. AO is directed to re-examine the issue in light of dividend income earned by the assessee for relevant assessment year, to determine disallowance of expenses relatable to exempt income. In case there is no exempt income for relevant assessment year, then Assessing Officer is directed to delete additions made towards disallowance of expenses u/s. 14A - Appeal filed by the assessee is treated as allowed for statistical purposes.
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