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Judgment
N.K. Billaiya, Accountant Member
The above two captioned appeal by the objection by the assessee are preferred against Commissioner of Income Tax [Appeals], Karnal pertaining to assessment year 2012-13. revenue and cross the order of the dated 23.12.2015
The underlying facts in the solitary grievance of the Revenue and Ground No. 2 of the cross objection are same and therefore, they are being disposed off together.
The bone of contention is the disallowance made u/s 14A of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] read with Rule 8D of the Income tax Rules, 1962. The Assessing Officer has disallowed Rs. 73,46,890/-, which has been restricted to Rs. 1,18,499/- by the ld. CIT(A).
The undisputed fact is that during the year under consideration, the assessee has not earned any exempt income from its investments. This fact has been accepted by the authorities below. Since during the subject assessment year there is no exempt income earned by the assessee, there cannot be any disallowance u/s 14A r.w.r 8D. This issue is by now well settled in favour of the assessee and against the revenue by the decision of the Special Bench of the Tribunal in the case of M/s Cheminvest Ltd 121 ITD 318 which was affirmed by the Hon'ble High Court of Delhi. Same view is taken by the Hon'ble Gujarat High Court in the case of Corrtech Energy (P) Ltd 372 ITR 97. In view of the above, disallowance of Rs. 73,46,890/- is directed to be deleted. Accordingly, the Ground raised by the revenue is dismissed whereas Ground No. 2 of the assessee in the cross objection is allowed.
All the other issues raised in the cross objection do not arise from the order of the first appellate authority and are, accordingly, dismissed.
In the result, the appeal of the revenue in ITA No. 1514/DEL/2017 is dismissed and the cross objection in CO No. 119/DEL/20174 is partly allowed.