2019 (7) TMI 614

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....sessment Year 2012-13. 2. The Revenue has proposed the following question of law: "A. Whether the Appellate Tribunal has erred in law and on facts in holding that no disallowance under section 14A of the Act can be made in obsence of exempt income ? B. Whether the Appellate Tribunal has erred in law and on facts in upholding the decision of CIT(A) deleting the suomotu disallowance made by the assessee ?" 3. The findings recorded by the Tribunal are as under : "6. We have carefully considered the rival submissions and perused the orders of the authorities below. The substantive question arises in the Revenue's appeal is to ascertain the correctness of the action of the CIT(A) in refusing to endorse the ac....

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.... (P.) Limited (2017) 80 taxmann.com 221(Madras) have expressed a clear disagreement with CBDT Circular and held that where there is no exempt income in relevant year there cannot be a disallowance of expenditure under s.14A of the Act. Similar proposition has been laid down by the Hon'ble Gujarat High Court in the case of Corrtech Energy (P.) Ltd (2014) 45 taxmann.com. 116 (Guj) and Pr.CIT vs. India Gelatine and Chemicals Ltd. (2016) 66 taxmann.com 356 (Guj). The aforesaid judicial fiat was reiterated by the Hon'ble Delhi High Court in the case of Joint Investments Pvt. Ltd. vs. CIT reported in 372 ITR 692 (Delhi) wherein Hon'ble Delhi High Court has categorically ruled that disallowance under s.14A of the Act cannot exceed the ....

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....ll not operate as any kind of estoppel against the assessee and regardless of whether the revised return was filed or not. Once the assessee is in a position to show that it has been over assessed under the provisions of the Act even on account of assessee's own mistake or otherwise, the Revenue is under duty to assess correct income." 4. Thus, it appears that the Tribunal concurred with the findings recorded by the CIT(A) that Section 14A of the Act can be invoked only if the assessee seeks to square off the expenditure against the income which does not form part of the total income under the Act, and in such circumstances, Section 14A of the Act could not have been invoked, more particularly, when no exempt income was earned in the....