The Pr. Commissioner Of Income Tax -6 v. Machino Plastic Ltd

$~14 *IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 438/2016 THE PR. COMMISSIONER OF INCOME TAX -6 ..... AppellantThrough: Mr. Ruchir Bhatia and Mr. Puneet Rai,Advs. versus MACHINO PLASTIC LTD. ..... RespondentThrough: Mr. Gautam Jain and Mr. Piyush KumarKamal, Advs. CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE NAJMI WAZIRIO R D E R%13.02.2017 The Revenue urges two questions of law in the present appealunder Section 260A of the Income Tax Act, 1961.First, thedisallowance made under Section 40(a)(ia) to the extent of `5,96,83,010/-. The ITAT noticed that for the previous year as well asthe later years the Revenue had accepted the assessee’s explanationthat since the amounts were made towards reimbursement, Section194C of the Act was not applicable.In these circumstances, thequestion of law does not arise. The second question which the ITAT had to deal with was thedisallowance of ` 13.51,985/- made by the AO in respect of incomereceived by the assessee towards the investment in Caparo MarutiLtd. The assessee had computed certain disallowance under Section14A which was brushed aside.The ITAT applied the reasoning propounded by this Court in its judgment reported as Cheminvest Ltd.vs CIT 61 Taxman.com 118.In these circumstances, given thatthere was no income, as the dividend income computation was nil, thedisallowance under Section 14A did not arise. No question of lawarises. For the above reasons, the appeal is without merit and is,accordingly, dismissed. S. RAVINDRA BHAT, J FEBRUARY 13, 2017/kk NAJMI WAZIRI, J