9911796707
TMI Blog2019 (11) TMI 1636X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee') by filing the present appeals sought to set aside the impugned orders both dated 19.11.2013 passed by the Commissioner of Income-tax (Appeals)- XXXI, New Delhi qua the assessment years 2009-10 & 2010-11 on the grounds inter alia that:- "ASSESSMENT YEAR : 2009-10 (A) That on the facts & circumstances of the case the learned ITO & the CIT(A} erred in : 1. Not reducing the amount of Rs. 24,69,20,357/- out of Rs. 28,00,00,000/- that had been added on account of the bogus purchases since the actual purchase made from the same parties were Rs. 3,30,79,643/-. 2. Upholding the Assessment & addition of Rs. 1,00,000/- u/s 14A inspite of the fact that the Assessment for the year had abated in terms of section 153A & no incriminating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direct or indirect investors in the flagship company of the group. Assessee has accounted sales of Rs. 189.39 crores & Rs. 3,00,17,053/- for AYs 2009-10 & 2010-11 respectively but without any income before tax from the trading activities. Ld. CIT (A) also noticed that net profit before tax was Rs. 88.81 lakhs and Rs. 79.48 lakhs which included difference of foreign exchange of Rs. 52.89 lakhs and Rs. 1.71 crores for AYs 2009-10 & 2010-11 respectively. 3. Assessing Officer (AO) also noticed that the assessee has made investment of Rs. 2 crores each in for AYs 2009-10 & 2010- 11 in the Tulip group companies. Ld. CIT (A), after calling upon the assessee to show cause as to why the disallowance under section 14A of the Income-tax Act, 1961 (f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been earned by the assessee during the year under assessment, no disallowance can be made. 9. Hon'ble Delhi High Court in the case of Cheminvest Limited vs. CIT (2015) 378 ITR 33 has held that, "In the absence of exempt income, disallowance u/s 14A of any amount was not permissible." So, we are of the considered view that since assessee has not earned any dividend income nor proved to have incurred any expenditure on the investment during the year under assessment, no disallowance can be made, hence disallowance of Rs. 1 lakh each in AYs 2009-10 & 2010-11 is ordered to be deleted. Consequently, grounds no.2, 3 & 4 are determined in favour of the assessee. 10. Resultantly, the appeals filed by the assessee are allowed. Order pronounce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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