Addl. CIT vs Him Urja Pvt Ltd
The assessee company is engaged in identifying the location, designing, construction, commissioning, generation and distribution of Hydro-electric Power. The assessee filed return of income at loss of Rs.5,90,06,240/-. The A.O. noted that assessee company has made investment of Rs.38.65 crores in the unquoted shares of M/s. Melkhet Power Private Limited for earning of dividend income. However, the assessee has not received any dividend income during the year. The A.O, however, by applying Rule 8D made the disallowance of the impugned amount under section 14A.
The Ld. CIT(A) following the decision of the Hon’ble Delhi High Court in the case of Chemnivest Ltd. vs. CIT-IV deleted the entire addition. Section 14A will not apply if no exempt income is received or receivable during the relevant previous year.
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