TaxTMI 
TaxTMI 
2026 (10) TMI 162
X X X X Extracts X X X X
X X X X Extracts X X X X
.... is erroneous to the extent it is prejudicial to the appellant herein; 2. The learned CIT (A) erred in confirming the action of the Assessing Officer in making disallowance of Rs. 26,97,886/-representing 1% of Rs. 26,97,88,576/-; 3. The learned CIT (A) ought to have considered the fact that no exempted income was derived during the year under consideration and the appellant did not enter into any transactions during the year under consideration and, therefore, no disallowance is required to be made. 4. Any other ground/grounds that may be urged at the time of hearing;" 3. The solitary issue arises in this appeal of the assessee is whether in the facts and circumstances of the case, the learned CIT(A) has erred ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e has not earned any exempt income during the year under consideration. An identical issue has been considered by the Hon'ble Delhi High Court in the case of CIT vs. GVK Project & Technical Services Ltd., (supra), wherein the Hon'ble High Court has reiterated its view in the case of Cheminvest Ltd. vs. CIT [2015] 378 ITR 33 (Del.) and held that in the absence of any exempt income disallowance was impermissible. The relevant findings of the Hon'ble Delhi High Court are as under: "1. The Revenue's appeal is with respect to the disallowance made by the Assessing Officer ('AO') under Section 144 of the Income-tax Act, 1961 (hereafter the Act'). The AO had proceeded to calculate the disallowance based upon the investment....
X X X X Extracts X X X X
X X X X Extracts X X X X
....see submitted before the Assessing Officer that no dividend income was earned by the assessee during the relevant year, thus no disallowance was called for but the Assessing Officer rejected the contention of the assessee and invoking section 14A of the Act read with Rule 8D of Income-tax Rules, 1962 (in short 'the Rules') made disallowance of Rs. 10,07,34,000/-. ** ** ** 81. Before us, there is no dispute on the fact that no dividend income was earned by the assessee during the relevant year and therefore respectfully following the finding of the Hon'ble Delhi High Court, we hold that no disallowance is required to made in terms of section 14A of the Act in the case of the assessee as no exempt income is recei....