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TMI Blog2019 (12) TMI 1601X X X X Extracts X X X X X X X X Extracts X X X X ..... on the facts and in the circumstances of the case and in law, the Ld CIT(A) was justified in deleting the disallowance of Rs.2,35,27,793/- made by AO u/s 14A r.w.r. 8(D) without appreciating that disallowance u/s. 14A can be made even in a year in which no exempt income was earned or received by the assessee. 2. Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in deleting the disallowance of Rs.2,35,27,793/- made by AO u/s 14A r.w.r. 8(D) without appreciating the CBDT Circular No 5/2014 dated 11.02.2014 has clarified that Rule 8D r.w.s. 14A of the Act provides for disallowance of the expenditure even where tax payer in a particular year has not earned any exempt income" 3. Whether on the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of the order of the Tribunal, we find that Tribunal held that there shall not be any disallowance u/s. 14A of the Act if the assessee has not earned any exempt income during the assessment year and while holding so Tribunal held as under: - "5. Heard Ld. DR, perused the orders of the authorities below. On a perusal of the order of the Ld. CIT(A), it is observed that the Ld. CIT(A) deleted the disallowance observing as under: - "8. I have carefully considered the facts of the case, the assessment order and the written submission of the appellant. It has been contended by the appellant that the provisions of section 14A are not applicable to the appellant's case since it has not earned any tax exempt income during the year. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. This ground of appeal is accordingly allowed." 6. It is an undisputed fact that during this Assessment Year assessee did not receive any exempt income. When no exempt income is received by the assessee, whether there can be any disallowance u/s. 14A has been considered by the Coordinate Benches of this Tribunal and it has been consistently holding that if there is no exempt income there should not be any disallowance u/s. 14A of the Act. In the case of ACIT v. M/s. Ballarpur Industries Ltd., in ITA. No. 346 to 379/NAG/2014 dated 04.12.2015 the Nagpur Bench of the Tribunal following the decision of the Hon'ble Delhi High Court in the case of Cheminvest v. CIT (supra) held as under: - "6. We have heard both the sides at some l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act can be made in a year in which no exempt income has been earned or received by the assessee. The Final verdict was as under: - "23. In the context of the facts enumerated hereinbefore the Court answers the question 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." 7. In short, in a situation when that very order of the Tribunal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llate Tribunal held that the provisions of Section 14A of the Income Tax Act, 1961 would not apply to the facts of this case as no exempt income was received or receivable during the relevant previous year. It is not the case of the Assessing Officer that any actual income was received by the assessee and the same was includible in the total income. In the facts of the case, the Authorities held that since the investments made by the assessee in the sister concerns were not the actual income received by the assessee, they could not have been included in the total income. The findings of facts recorded by both the Authorities do not give rise to any substantial question of law. Since no substantial question of law arises in this income t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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