Tribunal dismisses Revenue's appeal on disallowances under Income Tax Act sections 14A and 36(I)(iii).

The Tribunal dismissed the Revenue's appeal concerning disallowances under sections 14A and 36(I)(iii) of the Income Tax Act. Regarding section 14A, the Tribunal upheld the deletion of disallowance as no exempt income was earned. Concerning section 36(I)(iii), the Tribunal found in favor of the assessee based on precedents and lack of distinguishing facts for the current year. As no other issues were raised, the Revenue's appeal was dismissed on 17.12.2018.

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Issues:
1. Disallowance under section 14A of the Income Tax Act
2. Disallowance under section 36(I)(iii) of the Income-tax Act

Issue 1 - Disallowance under section 14A of the Income Tax Act:
The Revenue appealed against the deletion of disallowance made by the Assessing Officer under section 14A of the Income Tax Act. The CIT(A) deleted the additions based on the ground that no exempt income was earned during the relevant year. The Tribunal noted that various High Court decisions, including Punjab and Haryana High Court, have held that no disallowance is warranted under section 14A if the assessee did not earn any income not forming part of the total income. Consequently, the Tribunal found no merit in the Revenue's appeal on this issue.

Issue 2 - Disallowance under section 36(I)(iii) of the Income-tax Act:
The Revenue contested the deletion of the addition made by the Assessing Officer under section 36(I)(iii) of the Income Tax Act concerning interest expenditure. The Tribunal referred to a previous decision in the assessee's case where it was held that the assessee had enough own funds to cover the interest-free advances made. Relying on various High Court decisions and the Supreme Court's ruling in other cases, the Tribunal found in favor of the assessee. The issue was decided in line with precedents favoring the assessee, and no distinguishing fact was presented for the current year. Therefore, the Tribunal dismissed the Revenue's appeal on this issue as well.

The judgment concluded by stating that no other issues were raised, leading to the dismissal of the Revenue's appeal. The appeal was dismissed, and the order was pronounced in open court on 17.12.2018.

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