ITAT Cancels Disallowance Due to Absence of Exempted Income U/S 14A

The Income Tax Appellate Tribunal, Bangalore Bench, in the petition furnished to it ruled that there shall be no disallowance that has incurred under section 14A when no exemption of the income would be earned via the taxpayer.

The mentioned observation was incurred via Tribunal if the petition was made to it via taxpayer UKN Properties Pvt. Ltd, as against the order of CIT(Appeals)-7, Bangalore dated 18.3.201, for the assessment year 2013-14.

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The issue that has engaged in the petition is the disallowance incurred via AO u/s 14A r.w.s Rule 8D, the submission of Shri Narendra Sharma the taxpayer Advocate mentioned that as the taxpayer does not have any exempt income provided to tax, the question of disallowance u/s. 14A does not arise, while Shri V S Chakrapani, the CIT(DR), supported the orders of the lower authorities.

Seeing the oppositions from each other and learning the pursuant of the materials on record. Tribunal, N V Vasudevan, the Vice President, and Padmavathy S, the Accountant Member, held, acknowledging the fact that the taxpayer does not have made any tax exemption income in the year beneath the declaration and complying with the decision of the Hon’ble Delhi High Court in the case of Era Infrastructure India Ltd. we see that there is no disallowance warranted u/s.14A and delete the disallowance which would have been incurred in the same concern.