C/TAXAP/807/2019 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 807 of 2019 PRINCIPAL COMMISSIONER OF INCOME TAX-1 Versus ADANI WILMAR LTD. Appearance: MRS MAUNA M BHATT(174) for Appellant(s) No. 1 for Opponent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 13/01/2020 ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. This tax appeal filed under Section 260A of Income Tax Act, 1961 (for short Act, 1961 ) is at instance of Revenue and is directed against order dated 15th May, 2019 passed by Income Tax Appellate Tribunal, Ahmedabad Bench B in ITA No.2210/Ahd/2017 for A.Y.2014-15. 2. Revenue has proposed following question as substantial question of law arising for determination of this Court; Whether Appellate Tribunal has erred in law and on facts in deleting disallowance of Rs.9,11,32,805/- u/s.14A of Act? Page 1 of 4 Downloaded on : Mon Jan 20 11:17:56 IST 2020 C/TAXAP/807/2019 ORDER 3. Assessee had filed its return of income on 28th November, 2013 at Rs.1,25,71,480/-. Assessing Officer passed assessment order under Section 143(3) of Act by making disallowance under Section 14A read with Rule 8D of Income Tax Rules, 1962 in respect of expenditures incurred for investment made by respondent- assessee. 4. Being dissatisfied, assessee filed appeal before CIT (A), seeking to delete disallowance made by Assessing Officer by placing reliance on decision of this Court in case of CIT vs. Corrtech Energy Ltd., reported in (2014) 45 taxmann.com 116. CIT (A) partly allowed appeal of assessee by deleting disallowance made by Assessing Officer under Section 14A of Act, 1961. 5. Being dissatisfied with order passed by CIT (A), Revenue preferred appeal before Income Tax Appellate Tribunal. Tribunal, by impugned order, dismissed appeal preferred by Revenue holding as under; 5. We have heard both issues and perused material on record carefully. We have noticed that it is undisputed fact that assessee has not earned by exempt income during year under consideration. Vide number of judicial pronouncements Co-ordinate Benches of ITAT Ahmedabad have held that no disallowance shall be made under section 14A of Act if assessee has not earned any exempt income otherwise disallowance shall be restricted to exempt income. Section 14A(1) provides that for purpose of computing total income under chapter IV, no deduction shall be allowed in respect of expenditure incurred by assessee in relation to income which Page 2 of 4 Downloaded on : Mon Jan 20 11:17:56 IST 2020 C/TAXAP/807/2019 ORDER does not form part of other total income under act. We have noticed that Id. CIT(A) has followed decision of Co-ordinate Bench of ITAT in case of Shah Alloys Ltd. (2315/Ahd/2010 dated 27-03-2015 and decision of Hon'ble Gujarat High Court in case of CIT vs. Corretech Energy Pvt. Ltd. (45 Taxmann.com 116) identical issue of disallowance u/s. 14A when no dividend income is earned by assessee. judicial findings of Hon'ble jurisdictional High Court and decision of Co-ordinate Bench of ITAT have been elaborated in decision of Ld. CIT(A) vide which similar issue identical facts have been decided in favour of assessee. We have also perused judicial pronouncement in case of CIT v Corrtech Energy (p) Ltd (2014) 45 taxmann.com.116 of Hon'ble High Court of Gujarat wherein it is held that in case assessee did not make any claim for exemption of any income from payment of taxes, in that case disallowance u/s 14A of act could not be made. It is crystal clear that jurisdictional High Court has decided that to attract provision of section 14A it is required that assessee should have earned exempt income, if assessee has not earned exempt income and not claimed so in return of income then. provision of section 14A are not applicable. We find that during year under consideration assessee company has not earned any exempt income and has not claimed any such exempt income in return of income therefore as per our considered opinion provision of section 14A are not applicable. In view of above mentioned facts and circumstances and fellowing decision of Hon'ble jurisdictional High Court of Gujarat, we consider that disallowance u/s. 14A r.w.s Rule 8D cannot be made as assessee has not earned any exempt income. Accordingly, appeal of Revenue is dismissed. 6. As CIT (A) as well as Appellate Tribunal both have given concurrent finding of fact relying upon ratio laid down by this Court in case of Corrtech Energy Ltd. (supra), no question of law much less substantial question of law Page 3 of 4 Downloaded on : Mon Jan 20 11:17:56 IST 2020 C/TAXAP/807/2019 ORDER arises in present appeal. appeal is, accordingly, dismissed with no order as to costs. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) Vahid Page 4 of 4 Downloaded on : Mon Jan 20 11:17:56 IST 2020 Principal Commissioner of Income-tax-1 v. Adani Wilmar Ltd