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2022 (9) TMI 977 - Income Tax
Disallowance u/s. 14A r.w.r. 8D - Expenditure incurred on earning exempt income - HELD THAT:- As per the ratio laid down in the case of PCIT Vs. M/s. Era Infrastructure (I) Ltd [2022 (7) TMI 1093 - DELHI HIGH COURT] that no disallowance is to be made u/s. 14A of the Act in case the assessee has not earned any tax free income/exempt income during the year from such investments made by it. This ratio has also been followed by the Tribunal in the case Babul Fiscal Services P.Ltd [2022 (9) TMI 98 - ITAT KOLKATA].
Respectfully following the same, hold that since in the instant case also undisputedly there is no exempt income earned by the assessee, the ld.AO was not justified in making disallowance u/s. 14A r.w.r 8D. Therefore, set aside the finding of the ld. CIT(A) and delete the impugned addition made by the ld.AO u/s. 14A of the Act and allow ground nos. 1 to 4 raised by the assessee.