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आयकर अपीलीय अिधकरण अहमदाबाद (cid:586)ायपीठ डी अहमदाबाद ।

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IN THE INCOME TAX APPELLATE TRIBUNAL

“ D ” BENCH, AHMEDABAD

঒ी संजय गग१ (cid:586)ाियक सद(cid:735) एवं

,

अ(cid:580)पूणा१ गु(cid:593)ा, लेखा सद(cid:735) के सम঴।

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Before Shri Sanjay Garg, Judicial Member And

Annapurna Gupta, Accountant Member

आयकर अपील सं /ITA No.1945/Ahd/2025

िनधा१रण वष१ Assessment Year : 2017-18

/

Rajdhani Textiles Private Limited The Dy.CIT

(Merged entity of Sirius Financial बनाम Circle-3(1)(1)

Services Private Limited) / Ahmedabad – 380 015

v/s.

702, 7th Floor

Samudra Setu

Near Parsi Agiary

Opp. Anand Bhavan,

Opp. BD Desai

Mumbai – 400 026

Maharashtra

(cid:830)थायी लेखा सं./PAN: AABCR 1737 R

अपीलाथ५ Appellant) (ঋ(cid:797) यथ५ Respondent)

( / /

Assessee by : Shri P.D. Shah, AR

Revenue by : Shri Rameshwar P. Meena, Sr.DR

सुनवाई की तारीख Date of Hearing : 26 /02/2026

/

घोषणा की तारीख Date of Pronouncement: 13 /05/2026

/

आदेश O R D E R

/

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order

of the Learned Commissioner of Income Tax (Appeals) [ADDL/JCT(A)-4

BENGALURU, [hereinafter referred to as ‘CIT(A)’] dated 19/08/2025 passed

u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for

the Assessment Year (AY) 2017-2018.

ITA No.1945/Ahd/2025

Rajdhani Textiles Pvt.Ltd. vs. Dy.CIT

Asst. Year : 2017-18

2

2. The solitary issue involved in this appeal is against disallowance of

Rs.2,79,29,860/- u/s.14A r.w.Rule 8D of the IT Rules, 1962 made by the

Assessing Officer (AO) and further confirmed by the Ld. CIT(A) under

normal provisions and thereby to book profits also u/s 115JB of the Act on

account of expenditure incurred for the purpose of earning of tax exempt

income.

3. At the outset, the Ld.AR of the assessee has submitted that the lower

authorities were not justified in making the disallowance of expenditure

u/s.14A of the Act. He has contended that the assessee, during the

assessment year, had not earned any tax exempt income, whereas the

disallowance u/s.14A of the Act has been made. The ld. AR of the assessee,

has submitted that since the assessee did not earn any tax exempt income

during the year under consideration, therefore, no disallowance is

warranted u/s 14A of the Act. He in this respect has relied upon the

following case laws:

1. Cheminvest Ltd. vs. CIT 378 ITR 33 (Del);

2. CIT vs. M/s. Holcim India Pvt. Ltd. in ITA No. 486/2014 and

ITA No. 299/2014; Judgment dated 05-09-2014

3. CIT v. Shivam Motors (P.) Ltd. [2015] 230 Taxman 63;

4. CIT vs. Ashika Global Securities Ltd. (G.A. No. 2122 of 2014)

11/06/2018.

3.1. In all these case laws, Hon'ble High Courts have been unanimous to

hold that where the assessee has not derived any tax exempt income from

investments, then no disallowance is attracted u/s 14A of the Act.

ITA No.1945/Ahd/2025

Rajdhani Textiles Pvt.Ltd. vs. Dy.CIT

Asst. Year : 2017-18

3

4. The ld. DR, however, has relied upon the newly inserted explanations

to Section 14A of the Act, which is extracted for the sake of ready reference:-

"14A. [(1)] [Notwithstanding anything to the contrary contained in this

Act, for the purposes of] computing the total income under this Chapter,

no deduction shall be allowed in respect of expenditure incurred by the

assessee in relation to income which does not form part of the total

income under this Act.] ************************ ***********************

[Explanation.--For the removal of doubts, it is hereby clarified that

notwithstanding anything to the contrary contained in this Act, the

provisions of this section shall apply and shall be deemed to have always

applied in a case where the income, not forming part of the total income under

this Act, has not accrued or arisen or has not been received during the previous

year relevant to an assessment year and the expenditure has been incurred

during the said previous year in relation to such income not forming part of

the total income.]"

4.1. The ld. DR has further relied on the decision of the Co-ordinate Bench

of ITAT Guwahati in th