Siemens Gamesa Renewable Power Private Limited, Chennai V. ACIT, Corporate Circle 6(1), Chennai

ITA 753/CHNY/2023

AI Insights

The case revolves around the disallowance made by the Assessing Officer under Section 14A of the Income Tax Act, which pertains to the expenses incurred in relation to income that does not form part of the total income. The assessee contested the disallowance, arguing that no exempt income was earned during the relevant financial year. The CIT(A) upheld the Assessing Officer's decision, leading to an appeal by the Revenue. The main legal contention was whether disallowance under Section 14A was applicable in the absence of any exempt income. The court examined the facts, including the audited books of accounts, and found no evidence of exempt income, thus ruling in favor of the assessee.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129466 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-10-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 19-06-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 14A

Judgement Text

ITA No.753/Mds/2023 :- 3 -: being 0.5% average value of investments at ₹6,14,500/-, thereby aggregated disallowance of ₹20,15,792/-. Aggrieved, assessee preferred an appeal before the ld. CIT(A). 4. Ld. CIT(A) confirmed the action of the ld. Assessing Officer. Aggrieved, now Revenue is in appeal before us. 5. We have heard rival contentions and gone through the facts and circumstances of the case. We noted that assessee before the Assessing Officer as well as the ld. CIT(A) raised this issue that there is no dividend income earned by the assessee. Even before us, the ld. Counsel for the assessee made statement at bar that there is no exempt income earned by the assessee which is evident from the Audited books of accounts of the assessee. This fact is not denied by the ld. CIT –DR. Since there is no exempt income earned by assessee no disallowance can be made by invoking the provisions of Section 14A of the Act r.w.r 8D of the Rules. This view was supported by the decision of Hon’ble Supreme Court in the case of Maxopp Investment Ltd vs. CIT, (2018) 402 ITR 640, wherein it was held as under:- ‘’41. Having regard to the language of section 14A(2) of the Act, read with rule 8D of the Rules, we also make it clear that before applying the theory of apportionment, the Assessing Officer needs to record satisfaction that having regard to the kind of the assessee, suo motu disallowance under section 14A was not correct. It will be in those cases where the assessee in his return has himself apportioned