2020 (2) TMI 955

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....n the ITA No.2211/Ahd/2017 for the A.Y. 2013-14. 2 The Revenue has proposed the following solitary substantial question of law for the consideration of this Court: "Whether the Appellate Tribunal has erred in law and on facts in deleting the disallowance of Rs. 4,72,00,565/made under Section 14A of the Act read with Rule 8D of the Income Tax Rules?" 3 It appears from the materials on record that in the course of the assessment proceedings, the Assessing Officer noticed that the assessee had made investment to the tune of Rs. 27,78,87,305/on 31st March 2012 and the same was enhanced to Rs. 1,57,04,32,421/as on 31st March 2013. The Assessing Officer noticed that the assessee had not made any disallowance under Section 14A read ....

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....ue is here before this Court with the present appeal. 9 We take notice of the following findings recorded by the Tribunal in its impugned order: "5 We have heard both the issues and perused the material on record carefully. We have noticed that it is undisputed fact that assessee has not earned any exempt income during the year under consideration. Víde a number of judicial pronouncements the Coordinate Benches of the ITAT Ahmedabad have held that no disallowance shall be made under section 14A of the act if the assessee has not earned any exempt income otherwise the disallowance shall be restricted to the exempt income. Section 14A(1) provides that for the purpose of computing total income under chapter IV, no deduction ....

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....ration the assessee company has not earned any exempt income and has not claimed any such exempt income in the return of income therefore as per our considered opinion the provision of section 14A are not applicable. In view of the above mentioned facts and circumstances and following the decision of the Hon'ble jurisdictional High Court of Gujarat, we consider that the disallowance u/s. 14A r.w.s Rule 8D cannot be made as the assessee has not earned any exempt income. Accordingly, the appeal of the Revenue is dismissed." 10 In our opinion, the CIT(A) as well as the Appellate Tribunal rightly applied the dictum as laid by this Court in the case of Corrtech Energy (supra). In Corrtech Energy (supra), this Court held that the asse....