M/s. Mahesh Timber Pvt. Ltd., Karnal V. DCIT, Karnal

CO 119/DEL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9607 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 19 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 16-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ASHISH GOEL
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI E BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE , JUDICIAL MEMBER ITA NO. 15 14 /DEL/20 1 7 [A.Y 20 12 - 13 ] THE DY . C . I . T VS. M/S MAHESH TIMBER PVT LTD CIRCLE , KARNAL TIMBER MARKET, KARNAL NEW DELHI CO NO. 119/DEL/2017 [A/O ITA NO. 15 14/DEL/201 7 [A.Y 20 12 - 13 ] M/S MAHESH TIMBER PVT LTD VS. DY. C.I.T TIMBER MARKET, KARNAL CIRCLE, KARNAL PAN: AAC C M 5 526 G (APPLICANT) (RESPONDENT) ASSESSEE BY : SH RI ASHISH GOEL, C A DEPARTMENT BY : MS. RINKU SINGH , SR. DR DATE OF HEARING : 0 3 . 0 7 .201 9 DATE OF PRONOUNCEMENT : 0 4 . 0 7 .201 9 2 ORDER PER N.K. BILLAIYA , ACCOUNTANT MEMBER, THE ABOVE TWO CAPTIONED APPEAL B Y THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARE PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] , KARNAL DATED 2 3 . 12 .201 5 PERTA INING TO ASSESSMENT YEAR 20 12 - 13 . 2. THE UNDER LYING FACTS IN THE SOLITARY GRIEVANCE OF THE REVENUE AND GROUND NO. 2 OF THE CROSS OBJECTION ARE SAME AND THEREFORE, THEY ARE BEING DISPOSED OFF TOGETHER . 3. THE BONE OF CONTENTION IS THE DISALLOWANCE MADE U/S 14A OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] READ WITH RULE 8D OF THE INCOME TAX RULES, 1962. THE ASSESSING OFFICER HAS DISALLOWED RS. 73,46,890/ - , WHICH HAS BEEN RESTRICTED TO RS. 1,18,499/ - BY THE LD. CIT(A). 3 4. THE UNDISPUTED FACT IS THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME FROM ITS INVESTMENTS. THIS FACT HAS BEEN ACCEPTED BY THE AUTHORITIES BELOW. SINCE DURING THE SUBJECT ASSESSMENT YEAR THERE IS NO EXEMPT INCOME EARNED BY THE ASSESSEE, THERE CANNOT BE ANY DISALLOWANCE U/S 14A R.W.R 8D. THIS ISSUE IS BY NOW WELL SETTLED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF M/S CHEMINVEST LTD 121 ITD 3 18 WHICH WAS AFFIRMED BY THE HON'BLE HIGH COURT OF DELHI. SAME VIEW IS TAKEN BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CORRTECH ENERGY (P) LTD 372 ITR 97. IN VIEW OF THE ABOVE, DISALLOWANCE OF RS. 73,46,890 / - IS DIRECTED TO BE DELETED. ACCORDINGL Y, THE GROUND RAISED BY THE REVENUE IS DISMISSED WHEREAS GROUND NO. 2 OF THE ASSESSEE IN THE CROSS OBJECTION IS ALLOWED. 5. ALL THE OTHER ISSUES RAISED IN THE CROSS OBJECTION DO NOT ARISE FROM THE ORDER OF THE FIRST APPELLATE AUTHORITY AND ARE , ACCORDINGL Y , DISMISSED. 4 6 . IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO . 15 14/DEL/201 7 IS DISMISSED AND THE CROSS OBJECTION IN CO NO. 11 9 /DEL/201 7 4 IS PAR T LY ALLOWED. THE ORDER IS PRON OUNCED IN THE OPEN COURT ON 0 4 . 0 7 .201 9 . S D / - S D / - [ SUCHITRA KAMBLE ] [ N.K. BILLAIYA ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 4 T H JULY, 201 9 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 5 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER