TMI Blog2019 (12) TMI 1601X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri C.N. Prasad, Hon'ble Judicial Member And Shri Manoj Kumar Aggarwal, Hon'ble Accountant Member For the Assessee : Shri Amit Amlani. For the Department : Shri Maurya Pratap. ORDER PER C.N. PRASAD (JM) 1. This appeal is filed by the revenue against the order of the Learned Commissioner of Income Tax (Appeals)-12, Mumbai [hereinafter in short Ld. CIT(A) ] dated 25.05.2018 for the Assessment Year 2014-15. 2. Revenue has raised the following grounds in its appeal: - 1. Whether 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue is in appeal before us. 4. At the outset, Ld. Counsel for the assessee submitted that the issue in appeal is squarely covered by the Tribunal in assessee s own case in ITA. No. 4302/Mum/2018 dated 12.06.2019 for the A.Y. 2013-14 wherein the Tribunal deleted the disallowance u/s. 14A of the Act in the absence of exempt income. 5. Ld. DR vehemently supported the order of the Assessing Officer. 6. We have heard the rival submissions, perused the orders of the authorities below and the order of the Tribunal in assessee s own case for the A.Y. 2013-14. On a perusal 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evious year by the assessee. 10. Hence, having regard to the decisions of the Hon'ble High Courts and Hon'ble ITAT, Mumbai cited above, it is held that disallowance u/s. 14A is not warranted in the case of the assessee for the present assessment year in the absence of receipt of any tax exempt income from the investments made by it. In view of the same, M/s. Essel Utilities Distribution Co. Ltd., the A.O. is directed to delete the disallowance of Rs.1,45,59,7627- made u/s 14A of the Act in computation of total income as per the normal provisions of the Act and the book profit as per section 115JB of the Act. This ground of appeal is accordingly allowed. 6. It is an undisputed fact that during this Assessment Year asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted finding on facts, we have perused the decision of the Hon ble Courts. We may like to mention that a view has been expressed consistently that if there is no exempted profit then there is no question of invocation of the provisions of section 14A of the IT Act but, we have also carefully perused that very decision of the Tribunal namely Cheminvest Ltd. (supra) was reversed by the Hon ble Delhi High Court, copy placed in the compilation. The Hon ble Delhi High Court in ITA No.749/2014 vide order dated 02-09-2015 titled as Cheminvest Ltd. Vs CIT has decided the substantial question of law that whether disallowance u/s 14A of the Act can be made in a year in which no exempt income has been earned or received by the assessee. The Final ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on a perusal of the impugned orders, it appears that both the Authorities have recorded a clear finding of fact that there was no exempt income earned by the assessee. While holding so, the Authorities relied on the judgment of the Delhi High Court in Income Tax Appeal No. 749/2014, which holds that the expression does not form part of the total income in Section 14A of the Income Tax Act, 1961 envisages that there should be an actual receipt of the 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. The Income Tax Appellate Tribunal held that the provisions of Section 14A of the Income Tax Act, 1961 would not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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