2018 (9) TMI 526

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....rief facts of the case are that the Assessing Officer observed that the assessee has not shown any amount in column 17(L) of the audit report as amount disallowable u/s.14A. In the balance sheet of the assessee, it is seen that the assessee has shown investment of Rs. 10,67,74,909/- which were the same in the preceding year also. Therefore, he made disallowance u/s.14A of the Act r.w. 8D of IT Rules, 1962 of Rs. 56,95,726/-. 4. On appeal before the CIT(A), the assessee argued that the provisions of section 14A are not applicable to the assessee as during the year under consideration, the assessee has not claimed any exempt income u/s.10(34) of the Act. 5. The CIT(A) did not accept the submission of the assessee on the ground that even....

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....e Delhi High Court in the case of IL&FS Energy Development Ltd (supra) submitted that no disallowance of expenditure u/s.14A of the Act can be made where no exempt was earned by the assessee. 11. Ld D.R. has supported the orders of lower authorities. 12. Now it is settled position of law that whenever assessee did not earn any exempt income, no disallowance could be made u/s. 14A of the Act. The Hon'ble Delhi High Court in the case of Cheminvest Ltd. v. CIT, 378 ITR 33 (Del) has categorically held that section 14A envisages that there should be actual receipt of income which was not includible in the total income during the relevant previous year for the purpose of disallowing any expenditure in relation to the said income. Wherever t....