TaxTMI 
TaxTMI 
2019 (5) TMI 1196
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....246/- on account of inadmissible expenses u/s.14A r.w.r.8D of the Income Tax Rules, 1962. 3. At the time of hearing, the Ld. AR of the assessee submitted that no exempt income has been earned during the year and therefore, no disallowance u/s.14A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') is permissible. The Ld. AR further submitted that whatever investment has been made, has been made through its own interest free funds. The Ld. AR invites our attention to the Balance Sheet of the assessee-company wherein the total non-current investments made is Rs. 136,051,474/- shown in the assets. That the assessee's share capital is of Rs. 35,700,000/- and reserve and surplus is Rs. 51,704,671/- along with long term borrowin....
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.... income has been earned during the year. We find that Hon'ble Gujarat High Court in the case of CIT Vs. Cortech Energy P. Ltd. (2015) 372 ITR 97 (Gujarat) has held that when there is no claim for exempt income, Section 14A would have no application. We also find that Hon'ble Delhi High Court in the case of CIT Vs. Holcim India P. Ltd. (2014)90 CCH 81 (Delhi) has held that where no dividend income was earned by assessee, disallowance u/s. 14A is not warranted. Further the Balance Sheet of assessee reveals that the availability of interest free funds in the form of Share Capital and Reserves and Surplus is much more than the investment held by the assessee. On the issue of availability of free funds being more than investment, we find that Ho....
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....al had not been decided by this Court in Godrej and Boyce Manufacturing Co. Ltd. (Supra). It arose and was so decided for the first time by this Court in HDFC Bank Ltd. (Supra). Thus, there is no conflict as sought to be made out by the impugned order. Thus, impugned order has proceeded on a fundamentally erroneous basis as the ratio decidendi of the order in Godrej and Boyce manufacturing Co. Ltd. (Supra) had nothing to do with the rest of presumption canvassed by the petitioner before the Tribunal on the basis of the ratio of the decision of this Court in HDFC Bank Ltd. (Supra). 16. At the hearing Mr. Suresh Kumar, Learned Counsel for the Revenue urged that on the facts of this case no fault can be found with the order of the Tri....
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....ion nor has demonstrated that the aforesaid decision has been set aside or overruled by higher judicial authority. Considering the totality of aforesaid facts, we are of view that in the present case no disallowance u/s. 14A us caked for. Thus, the grounds of appeal of assessee is allowed." 3.2 Further, the Ld. AR of the assessee has placed reliance on the decision of the Hon'ble Delhi High Court in the case of Pr. Commissioner of Income Tasx Vs. Oil Industries Development Board in ITA No.197/2018 wherein during the assessment proceedings, the Assessing Officer made disallowance u/s.14A of the Act by taking into account only assessee's investment patterns. The Ld. CIT(A) confirmed such disallowance made by the Assessing Officer. The Inco....