Case Law Details
DCIT Vs Jite Shipyard Ltd (Delhi High Court)
Introduction: In a recent case involving the Income Tax Appellate Tribunal, the Delhi High Court addressed a crucial issue related to the disallowance made under Section 14A of the Income-tax Act, 1961 (the Act). The appellant, the Deputy Commissioner of Income Tax (DCIT), contested the order passed by the Tribunal for the Assessment Year 2015-16. The central question before the court was whether the disallowance under Section 14A could exceed the exempt income earned by the respondent, Jite Shipyard Ltd.
Detailed Analysis: The central issue presented in the appeal focuses on the interpretation of Section 14A of the Income-tax Act and its application to the expenses related to income other than gross income. The dispute, while seemingly straightforward, delves into the nuanced understanding of the relationship between disallowances and exempt income.
The Delhi High Court, in its judgment, refers to precedent-setting cases such as Cheminvest Limited v. Commissioner of Income Tax-VI (2015) 61 taxmann.com 118 and Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd. (2017) 80 taxmann.com 221 (Madras). The court notes that the issue at hand is already settled by these judgments.
It’s noteworthy that Justice Rajiv Shakdher, who authored the judgment in Commissioner of Income-tax, Central 1, Chennai v. Chettinad Logistics (P.) Ltd., was part of the bench overseeing the present case. The Supreme Court, in a subsequent Special Leave Petition (SLP) filed against the mentioned judgment, dismissed the appeal on both delay and merits on 02.07.2018.
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