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TMI Blog2015 (10) TMI 2674X X X X Extracts X X X X X X X X Extracts X X X X ..... e Revenue arises out of the order passed by the learned CIT(A) on 12th May, 2014 deleting penalty of Rs. 5,32,830/- imposed by the Assessing Officer u/s 271(1)(c) of the Income-tax Act, 1961 in relation to assessment year 2008-09. 2. Briefly stated, the facts of the case are that the assessee is engaged in the business of manufacturing of ceramic glazed tiles and trading in tiles. The assessee fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial on record. It is observed that the assessee declared income of Rs. 19.27 crore which was adjusted against brought forward unabsorbed depreciation for earlier year and the net resultant income was Nil. The assessee also disclosed book profit u/s 115JB at Rs. 19.37 crore and tax was paid u/s 115JB at Rs. 2.27 crore. Even after order u/s 143(3) of the Act, the normal income of the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income or furnished inaccurate particulars of income. Where a deduction is claimed after making a proper disclosure, the mere fact that the disallowance has been made for a part of such deduction, it cannot be construed as a case covered u/s 271(1)(c) of the Act. The Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC) has held that no penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Jurisdictional High Court has held that disallowance u/s 14A cannot exceed the exempt income. These judicial pronouncements make it amply clear that there cannot be any disallowance u/s 14A if there is no exempt income. I am confronted with a situation in which the assessee has not earned any exempt income but the disallowance has been made to the extent of Rs. 13.64 lakh by applying Rule 8D. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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