2019 (8) TMI 150

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....under:- 2.1 The assessee, a company engaged in deputing professionals for computer related software services, ITES and placement services, filed its return for Assessment Year 2013-14 on 28.11.2013. Subsequently, a revised return was filed on 28.11.2013 declaring a loss of Rs.(-) 2,89,68,291/-. The case was taken up for scrutiny for this Assessment Year and the assessment was concluded under section 143(3) of the Income Tax Act, 1961 (in short 'the Act') vide order dated 04.03.2016, wherein the assessee's loss was determined at Rs.(-)2,58,52,654/-; in view of, inter alia, disallowance under section 14A of the Act r.w.Rule 6D of the Income Tax Rules, 1962 (in short 'the Rules') of an amount of Rs. 22,21,686/- [i.e., Rs. 10,04,359/- under ....

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....d; including the judicial precendents cited (supra). It is a matter of record and not disputed that the assessee had not earned any exempt income in the year under consideration and this fact is admitted by the learned CIT(A) in the impugned order. The applicability of the provisions of section 14A of the Act is in respect of expenditure incurred in relation to the earning of income not includible in total income. A plain reading of the provisions of section 14A of the Act envisages that there should be an actual receipt of income which is not includible in the total income. Therefore, the provisions of section 14A of the Act will not apply where no exempt income is received or receivable by the assessee during the relevant previous year. T....

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....h is not includible in the total income during the relevant previous years for the purpose of disallowing any expenditure incurred in relation to the said exempt income. A similar view has been taken by a coordinate bench of this Tribunal in the case of Tanglin Retail Reality Developments Private Limited v DCIT in ITA No. 265/Bang/2016 dated 31.03.2017, considering the decisions of the Hon'ble Karnataka High Court in the case of CCI Ltd. (supra) and of ITAT, Mumbai in Fair Exports (India) P. Ltd.(supra). Therefore, in the factual matrix of the case on hand, as discussed above, we, respectfully following the decisions of the Hon'ble Delhi High Court in the case Cheminvest Ltd. (supra) and the co-ordinate bench in Tanglin Retail Reality Devel....