2023 (8) TMI 882

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....17-18. 2. In its appeal, the assessee has raised the following grounds:- "I. DISALLOWANCE UNDER SECTION 14A r.w.r 8D OF THE ACT OF Rs. 18,45,867/- 1.1 On the facts and in circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) [CIT(A)] erred in confirming the disallowance under Section 14A read with rule 8D for a sum of Rs. 18,45,867/- made by the learned Assessing Officer. 1.2 The learned CIT (Appeals) failed to appreciate that the appellant had not earned any dividend income and therefore the provisions of Section 14A were not applicable in the case of the appellant. 1.3 The learned CIT(Appeals) also failed to appreciate the submissions made and explanations furnished by the appellant as also the le....

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....manating from the record, are that the assessee is engaged in the business of erection and commissioning of industrial machinery, civil and engineering construction including mechanical, electrical, piping for its clients in petroleum and electricity generation, continuation and other process industries such as steel plants, aluminium plants, etc. For the year under consideration, the assessee filed its return of income on 31/10/2017 declaring a loss of Rs. 2,01,33,920 as per normal provisions of the Act and a loss of Rs. 90,08,900 under section 115JB of the Act. The return filed by the assessee was selected for scrutiny and statutory notices under section 143(2) as well as section 142(1) of the Act were issued and served on the assessee. D....

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.... The aforesaid fact has also not been disputed by the Revenue. We find that the Hon'ble Delhi High Court in Cheminvest Ltd. v. CIT: [2015] 378 ITR 33 (Delhi) held that section 14A will not apply if no exempt income is received or receivable during the relevant previous year. We further find that the Hon'ble jurisdictional High Court in Pr.CIT v/s Kohinoor Project (P) Ltd., [2020] 121 taxmann.com 177 (Bom.), rendered similar findings and dismissed the Revenue's appeal on a similar issue. Since, in the present case, the assessee has not earned any dividend income, therefore, respectfully following the aforesaid judicial pronouncements, disallowance of expenditure under section 14A read with Rule 8D is not sustainable. 7. We further find that....