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2018 (10) TMI 1037 - HC - Income TaxDisallowance u/s 14A - no exempt income earned - Held that:- In Cheminvest Ltd's case [2015 (9) TMI 238 - DELHI HIGH COURT] it was reiterated that Section 14A of the Act envisages that there should be an actual receipt of income, which is not includable in the total income during the relevant previous year for purpose of disallowing any expenditure under Section 14A of the Act in relation to said income. Examining the factual matrix, it may be noticed that the Tribunal while relying upon the judgment of this Court in Commissioner of Income Tax v. Lakhani Marketing Inc.[2014 (7) TMI 44 - PUNJAB AND HARYANA HIGH COURT] had held that Section 14A of the Act cannot be resorted to in the year in which no exempt income had been earned. However, the revenue relied upon the CBDT Circular dated 11.2.2014 to contend that Section 14A of the Act can be invoked even in the year in which no exempt income had been earned. Accordingly, the Tribunal had dismissed the appeal of the revenue holding that unless and until there is receipt of exempted income for the concerned assessment year, Section 14A of the Act is not attracted. - decided in favour of assessee.
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