2026 (7) TMI 283

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... 2. The Revenue has raised the following grounds of appeal: (1) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the addition made on account of disallowance of Rs. 2,38,25,000/- under section 14A read with Rule BD of the Income-tax Rules, 1962, without appreciating the facts of the case?" (2) Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in not appreciating the fact that the AO, after proper satisfaction and detailed reasoning in the assessment order, had correctly computed the disallowance under section 14A read with Rule BD in strict conformity with the provisions of the Act and judicial precedents appl....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....cial precedents. i. ITA No.1837/Ahd/2025 dated 12.02.2026 in the case of Adani Logistics Ltd. ii. ITA No.229/Ahd/2026 dated 23.03.2026 in the case of Arvind Fashions Limited iii. Gujarat High Court in the case of Chettinand Logistics Pvt Ltd. [2018]95 taxamann.com 250 iv. Gujarat High Court In Correch Energy (P) Ltd (45 taxmann.com 116) 5. We find that the issue is squarely covered by the decision of Coordinate Bench of ITA in ITA No.1837/Ahd/2026 dated 12.02.2026. The relevant extract of the order is reproduced as under: "...6. Per contra Shri Dhrunal Bhatt, the Ld. A.R of the assessee submitted that the assessee did not earn any exempt income during the year. Under the circumstances, no disa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n of any income, disallowance u/s.14A of the Act could not be made. Similarly, Hon'ble Gujarat High Court had held in the case of PCIT vs. Adani Wilmar Limited, 133 taxmann.com 443 (Guj.) that no disallowance under Section 14A of the Act can be made if the asses500 did not earn any exempt income during the year. The provision of Section 144 of the Act was amended and an Explanation was inserted w.e.f. 01.04.2022, as per which the disallowance under Section 14A of the Act can be made, even if no exempt income is earned during the year. The Hon'ble Guwahati High Court in the case of Williamson Financial Services Limited vs. CIT (supra) has held that the Explanation inserted to Section 14A of the Act vide Finance Act, 2022 w.e.f 01.04.....