2023 (8) TMI 878

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....the learned CIT(A) has erred in sustaining the order of the A.O wherein the A.O has erred in making disallowance of Rs. 59,13,532/-u/s. 14A r.w.r.8D of the Income Tax Act, 1961. The disallowance made by the A.O and confirmed by the CIT(A) is unjustified, unwarranted, and uncalled for. 2. The appellant reserves the right to add, amend or alter any grounds of appeal at any time of hearing." 2. Briefly stated, the facts of the case are that the assessee is a private limited company and has filed its return of income for A.Y.2013-14 showing nil income on 28.09.2013. However, tax has been paid on the book profit of Rs. 5,00,67,067/- under MAT u/s. 115JB of the Income Tax Act, 1961 (for short 'the Act'). The case of the assessee was specifical....

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....the various decisions, out of which, decisions of the Hon'ble Apex Court are as under: (i) CIT Vs. Chettinad Logistic Pvt. Ltd. (2017) 98 CCH 151 (SC)/SLP dismissed by the Hon'ble Apex Court (2019) 105 CCH 226 ISCC. (ii) Pr. Commissioner of Income Tax Vs. Oil Industrial Development Board (2018) 101 CCH 452 (Del. HC) and SLP dismissed by the Hon'ble Apex Court (2019) 104 CCH 156 ISCC (iii) Redington India Limited Vs. Additional Commissioner of Income Tax (2016) 97 CCH 219 Chen HC. The Ld. AR further submitted that the assessee's exempt income which is evident from computation of total income furnished before us at Page No.14 of paper book of the assessee where share of profit from partnership firm was for Rs. 3,82,401/- was only exemp....

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....), for the words "For the purposes of", the words "Notwithstanding anything to the contrary contained in this Act, for the purposes of" shall be substituted; (b) after the proviso, the following Explanation shall be inserted, namely:- "[Explanation.--For the removal of doubts, it is hereby clarified that notwithstanding anything to the contrary contained in this Act, the provisions of this section shall apply and shall be deemed to have always applied in a case where the income, not forming part of the total income under this Act, has not accrued or arisen or has not been received during the previous year relevant to an assessment year and the expenditure has been incurred during the said previous year in relation to such income not for....

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....rent that the assessee company had earned exempt income on account of share of profit from partnership firm for an amount of Rs. 3,82,401/-. We, thus, in terms of our aforesaid observations, are of the considered view that the addition should be restricted to the extent of exempt income i.e. Rs. 3,82,401/-. The Hon'ble Delhi High Court in the judgment Cheminvest Ltd. vs. CIT (2015) 378 ITR 33 (Del) has held that if there is no exempt income, there cannot be any disallowance u/s 14A. Similar view has been taken by the Hon'ble Delhi High Court in CIT vs. Holcim India P. Ltd. (2014) 90CCH 081-Del-HC. The net effect of these decisions is that the disallowance u/s 14A gets restricted to the extent of exempt income, even if the provisions of the ....