2021 (2) TMI 1335 - AT - Income Tax

Tribunal upholds CIT(A)'s decision on expenses under section 14A

The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete the addition of expenses under section 14A read with Rule 8D. The ... Disallowance of expenses u/s 14A read with Rule 8D - HELD THAT:- As the submissions before the Assessing Officer was also that there was no exempt income earned during the year and no expenditure was incurred during the year towards exempt income. Thus, the CIT(A) has rightly deleted the addition in light of the decisions of case of Cheminvest Ltd. [2015 (9) TMI 238 - DELHI HIGH COURT] and CIT Vs. Holcim Ltd. [2014 (9) TMI 434 - DELHI HIGH COURT] CIT(A) has given a detailed finding and there is no need to interfere with the same in light of the decision of the Jurisdictional High Court. In fact, the issue is covered by the decision of the Apex Court decision in case of Maxopp Investment Ltd. [2018 (3) TMI 805 - SUPREME COURT]. Thus, there is no need to interfere with the findings of the CIT(A). Hence, the appeal of the Revenue is dismissed. Issues:1. Disallowance of expenses under section 14A read with Rule 8D.Analysis:Issue 1: Disallowance of expenses under section 14A read with Rule 8DThe appeal before the Appellate Tribunal ITAT Delhi was filed by the Revenue against the order passed by CIT(A)-1, New Delhi for the assessment year 2014-15. The main ground of appeal was the deletion of an addition of Rs. 3,14,71,557/- made by the Assessing Officer on account of disallowance of expenses under section 14A read with Rule 8D. During the hearing, no one appeared for the assessee, so the submissions made before the CIT(A) were considered. The Revenue contended that the CIT(A) was not justified in deleting the addition and referred to the assessment order. However, after hearing the arguments and examining the material on record, the Tribunal found that the assessee had not earned any dividend income and had not incurred any expenditure towards exempt income during the year. The Tribunal noted that the CIT(A) had rightly deleted the addition based on decisions of the Hon'ble Delhi High Court and the Apex Court. Specifically, the Tribunal mentioned the cases of Cheminvest Ltd. Vs. CIT, CIT Vs. Holcim Ltd., and Maxopp Investment Ltd. vs. CIT. Consequently, the Tribunal dismissed the appeal of the Revenue, upholding the CIT(A)'s decision and concluding that there was no need to interfere with the findings given the legal precedents cited.In conclusion, the Tribunal dismissed the appeal of the Revenue, affirming the decision of the CIT(A) in deleting the addition of expenses under section 14A read with Rule 8D. The order was pronounced in the Open Court on February 17, 2021, in the presence of the Ld. DR.