2021 (4) TMI 110

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.... deleting the additions made by the A.Q in accordance with the express provisions u/s.14A of the Income Tax Act, 1961 and CBOT circular No.5/2014 dated l1002.2014?'' 2. "Whether the CIT (A) is correct in relating the disallowances Nil to exempt income earned during the year when Sec.14A does not use the word "income of the year" but "income under the Act" and in light of the clarification issued by the CBDT that Rule.8D r.w.s.14A provides for disallowance of expenditure where the taxpayer in a particular year has not earned any exempt income ?" 3. "Whether on the facts and circumstances of the case and in Nil law, the ClT(A) is correct in limiting disallowance uls.14A r.w.r 8D(2)(ii} only on the average investment which yielded ....

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....ould not be made in this case. The AR of the assessee company vide its letter dated 03-11-2017 submitted that for the purpose of disallowance u/s 14A rwr 8D, there should be an actual receipt of income which is not forming part of the total income and the disallowance is not applicable if no exempt income is earned. The assessee further stated that in the instant case, since the assessee company has not earned any exempt income, the provisions u/s 14A of the Act are not applicable. In support of his claim, the AR of the assessee also relied on various case laws some of which are given as under: i) Cheminvest Limited vs CIT (ITA 749/Del.(2014) ii) CIT vs Holcim India Pvt Ltd (2014) 90 CCH 081 (Del HC) iii) ACIT vs Vireet Investments Pv....