On granting relief to TV Today Network, the assessee the Income Tax Appellate Tribunal (ITAT), New Delhi held that no question of disallowance under Section 14A of the Income Tax Act, 1961 arises on non-receipt of exempt income during the year under consideration.
The ground raised for appeal is in respect of deleting the disallowance of Rs. 56,20,737 u/s 14A of the Act on the ground that disallowance under Section 14A of the Income Tax Act, 1961 cannot exceed exempt income.
The assessee is engaged in the business of broadcasting, telecasting, relaying, transmitting, or distributing audio video or other programs of software for television, radio, and other media. The A.O invoking provision of Section 14A of the Act made a disallowance of Rs. 56,27,37/- while making the said disallowance the A.O has recorded a clear finding that “the controversy raised in the instant case was the assessee had not earned or received any dividend in the year under consideration. Therefore, no disallowance can be made by invoking the provision of Section 14A.”
The Bench consisting of Shamim Yahya, an Accountant Member, and Yogesh Kumar the US, Judicial Member observed that “The CIT(A) after relying on the ratio laid down by the various Courts including Jurisdictional High Court held that disallowance u/s 14A made only if the assessee is in receipt of exempt income. As the assessee company has not received any exempt income during the year under consideration, therefore, the question of disallowance u/s 14A of the Act does not arise. Therefore, in the facts and circumstances and also by following the order of this Tribunal in the assessee’s own case, we do not find merit in the Revenue’s Appeal.”
Madhur Aggarwal appeared for the assessee and R S Yadav, Senior DR appeared for the Revenue.
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