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2022 (7) TMI 1162 - HC - Income TaxDisallowance u/s14A read with Rule 8D(iii) - ITAT made deletion of the disallowance made under Section 14A of the Act by relying upon circular no. 5/2014 dated 11th February, 2014 - HELD THAT:- The said challenge of the department cannot be accepted in view of the judgment of this Court in Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT wherein Court answers the questions framed by holding that the expression ‘does not form part of the total income’ in Section 14A of the envisages that there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year. The aforesaid judgment has held field since 2015 and has been consistently applied by the ITAT and followed by this Court in all subsequent matters. ITAT admitting additional ground raised by the assessee regarding the treatment of subsidy - HELD THAT:- No error was committed by the ITAT by permitting the assessee to raise the additional ground at the stage of the appeal because there is no dispute raised by the department to the fact that the said subsidy given by State of Jammu & Kashmir to the assessee is liable to be treated as a capital receipt in view of the judgment of Shri Balaji Alloys [2011 (1) TMI 394 - JAMMU AND KASHMIR HIGH COURT]
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