The appeal ITA No. 241/DEL/2021 features Premier Udyog Ltd challenging the decision from the CIT(A)-29, New Delhi, for the assessment year 2017-18, specifically addressing disallowances made under section 14A in the absence of exempt income.
The case focuses on whether expenses can be disallowed under section 14A when there is no exempt income earned during the year. The primary grounds of the appeal concern the legal appropriateness of the disallowances made.
The tribunal examined the application of section 14A in light of the appellant’s circumstances, where no exempt income was reported, and the self-disallowance previously made by the appellant.
Upon reviewing the arguments and precedents, the tribunal decided in favor of the appellant, overturning the disallowances and referencing similar cases to substantiate their decision. This was guided by the principle established in the Delhi High Court’s decision in Cheminvest Limited vs. Commissioner of Income Tax-VI, where it was held that disallowances under section 14A are not applicable if no exempt income is earned.
This judgment reaffirms the tribunal’s stance on the non-applicability of section 14A disallowances when exempt income is absent, impacting how similar cases might be adjudicated in the future.
Premier Udyog Ltd vs. ACIT Circle-20(1), New Delhi for AY 2017-18 – ITA No. 241/DEL/2021
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