TMI Blog2017 (11) TMI 1618X X X X Extracts X X X X X X X X Extracts X X X X ..... - Decided in favour of assessee. Disallowance u/s 14A - Held that:- The assessee had not earned any exempt income during the year and as such no expenditure could be said to have been incurred to earn the exempt income. It is settled law that if there is no exempt income, no disallowance u/s 14A can be made. See CIT vs. Holcim India Pvt. Ltd [2014 (9) TMI 434 - DELHI HIGH COURT]- Decided in favour of assessee. - ITA No.:- 5010/Del /2015 - - - Dated:- 16-11-2017 - SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER Department by: Shri Surenderpal, Sr. DR Assessee by : Shri Tarun Kumar Batra, CA O R D E R PER SUDHANSHU SRIVASTAVA, J.M. This appeal has been preferred by the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. It was further submitted that, accordingly, the assessee was required to deduct tax at source on the bank guarantee commission and, therefore, the addition had been rightly made by the A.O. 3.1 Regarding the second ground pertaining to disallowance u/s 14A, the Sr. DR submitted that the disallowance u/s 14A read with Rule 8D of the Income Tax Rules is mandatory and has to be calculated at % of the average investment which the A.O. had done. It was further submitted that the Ld. CIT (A) was patently wrong in deleting the said addition. 4. In response, the Ld. Authorised Representative submitted that as far as the issue of disallowance of ₹ 40,19,608/- u/s 40(a)(ia) was concerned, this bank guarantee commission was charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther submitted that during the year under consideration no fresh investment in shares and securities was made. Reliance was placed on the judgment of the Hon ble High Court in the case of CIT vs. Holcim India Private Limited in ITA No. 486/2014 and ITA No.291/2014 wherein the Hon ble Delhi High Court had held that there could be no disallowance of expenditure for earning of exempt income in case where no exempt income was earned during the year. 5. We have heard the rival submissions and have perused the material on record. Regarding the disallowance of ₹ 40,19,608/- u/s 40(a)(ia) of the Act, it has seen that this issue is covered in favour of the assessee by order of ITAT Mumbai Bench in the case of Kotak Securities Limited vs. DC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance u/s 14A can be made. This issue is also covered in favour of the assessee by order of Hon ble High Court in the case of CIT vs. Holcim India Pvt. Ltd. (supra). The Hon ble Delhi High Court has held in paragraph 14 of the said judgment:- 14. On the issue whether the respondent-assessee could have earned dividend income and even if no dividend income was earned, yet Section 14A can be invoked and disallowance of expenditure can be made, there are three decisions of the different High Courts directly on the issue and against the appellant-Revenue. No contrary decision of a High Court has been shown to us. The Punjab and Haryana High Court in Commissioner of Income Tax, Faridabad Vs. M/s. Lakhani Marketing Incl., ITA No. 970/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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