TaxTMI 
TaxTMI 
2026 (10) TMI 280
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....Act, 1961 (in short 'Act') for the A.Y. 2018-19. 2. The Revenue has raised two issues in the present appeal. The first issue relates to the deletion of the disallowance of Rs. 10,86,74,067/- made under section 14A of the Income-tax Act, 1961 ("the Act"). The second issue pertains to the relief granted by the Learned Commissioner of Income-tax (Appeals) ['Ld. CIT(A)'] in respect of the addition of Rs. 3,06,670/- relating to a sundry creditor, namely M/s. Gaud Water-pump Service Ltd., which was treated by the Assessing Officer ("Ld. AO") as a bogus liability on the ground that the said party had not responded to the notice issued under section 133(6) of the Act. 3. In so far as the first issue is concerned, the Ld. CIT(A) deleted the di....
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....le Supreme Court, reported in (2018) 95 taxmann.com 250 (SC). The reliance was also placed on the judgment of the Hon'ble Delhi High Court in the case of Cheminvest Ltd. v. Commissioner of Income-tax-IV, reported in (2015) 61 taxmann.com 118 (Delhi), wherein it was held that section 14A would have no application where no exempt income has been received or has accrued during the relevant previous year. 5. We have considered the rival submissions and perused the material available on record. It is an admitted position that the assessee did not earn any exempt income during the relevant previous year. The legal position that no disallowance under section 14A can be made in the absence of exempt income is no longer res integra and stands....
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....ised by the Revenue on this issue are dismissed. 8. The second issue relates to the relief granted by the Ld. CIT(A) in respect of the addition made on account of the outstanding balance of Rs. 3,06,670/- standing in the name of M/s. Gaud Waterpump Service Ltd. The Ld. AO treated the entire amount as a bogus liability primarily on the ground that the creditor did not respond to the notice issued under section 133(6) of the Act. The assessee was also unable to furnish a confirmation from the said party, explaining that the relevant period coincided with the COVID-19 pandemic. 9. The Ld. CIT(A), after examining the material available on record, found that the assessee had produced the books of account, ledger extracts, payment details a....