Adani Wilmar Limited, Ahmedabad V. DCIT, Circle-1(1)(1), Ahmedabad

CO 82/AHD/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2184 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 25-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 143(3); 142(1); 14A; 115JB; 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER THE DCIT, CIR - 1(1)(1), AHMEDABAD (APPELLANT) VS ADANI WILMAR LTD. 3 RD FLOOR FORTUNE HOUSE, NAVRANGPURA, AHMEDABAD - 380009 PAN: AABCA8056G (RESPONDENT) ADANI WILMAR LTD. 3 RD FLOOR FORTUNE HOUSE, NAVRANGPURA, AHMEDABAD - 380009 PAN: AABCA8056G (APPELLANT) VS THE DCIT, CIR - 1(1)(1), AHMEDABAD (RESPONDENT) REVENUE BY : S H RI KISHAN VYAS , CIT - D . R. ASSESSEE BY: SHRI BIREN SHAH , A.R. DATE OF HEARING : 20 - 02 - 2 020 DATE OF PRONOUNCEMENT : 20 - 02 - 2 020 / ORDER I T A NO . 2044 / A HD/20 18 A S S ESSMENT YEAR 2015 - 16 CROSS OBJECTION NO. 82/AHD/2019 (IN ITA NO. 2044 /AHD/20 18) ASS ESSMENT YEAR 2015 - 16 I.T.A NO. 2044 /AHD/20 1 8 & CO NO. 82/AHD/2019 A.Y. 2015 - 16 PAGE NO DCIT VS. ADANI WILMAR LTD. 2 P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2015 - 16 , ARI SES FROM ORDER OF THE CIT(A) - 1, AHMEDABAD DATED 28 - 08 - 2 018 , IN PROCEEDINGS UNDER SECTION 1 4 3(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE R EVENUE HAS FILED APPEAL AGAINST THE DECISION OF LD. CIT(A) IN DELETING THE ADDITION FOR RS. 13 , 55 , 80 ,0 00/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DISALLOWANCE U/S. 14A R.W.R. RULE 8D OF THE I.T. ACT AND IN DELETING THE SIMILAR ADDITION WHILE COMPUTING BOOK PROFIT U/S. 115JB OF THE ACT. THE ASSESSMENT U/S. 143(3) OF THE ACT WAS COMPLETED ON 30 TH NOV, 2017. DURING THE COURSE OF ASSESSMENT ON VERIFICATION OF THE DETAIL , THE ASSESSING OFFICER NOTICED THAT ASSESSEE COMPANY HAS MADE INVESTMENT IN SHARES TH E INCOME FROM WHICH IS EXEMPT FROM TAXES. ON VERIFICATION OF P & L A CCOUNT THE ASSESSING OFFICER FOUND THAT ASSESSEE HAS CLAIMED EXPENDITURE INCURRED ON ACCOUNT OF INTEREST PAYMENT ON LOANS DURING THE YEAR UNDER CONSIDERATION . TH E ASSESSING OFFICER WAS O F THE VIEW THAT ASSESS EE HAD NOT DISALLOWED ANY EXPENSES PERTAINING TO EXEMPT INCOME NOT INCLUDED IN THE TOTAL INCOME . THEREFORE, VIDE NOTICE U/S. 142(1) OF THE ACT THE ASSES S EE WAS ASKED TO EXPLAIN WHY NOT PROVISION OF SECTION 14A OF THE ACT R.W.R . 8D OF THE I.T. ACT SHOULD BE ATTRACTED I N THE CASE OF THE ASSESSEE. THE ASSESSEE HAS GIVEN DETAILED EXPLANATION REPORTED AT PAGE NO. 2 TO 7 OF THE ASSESSMENT ORDER STATING THAT ASSESSEE COMPANY HAS NOT EARNED DIVIDEND INCOME OR ANY OTHER INCOME WHICH WAS NOT CH ARGEABLE TO TAX. THE ASSESSING OFFICER HAS NOT AGREED WITH THE SUBMISSION OF T H E ASSESSEE AND COMPUTE D EXPENSES DISALLOWABLE U/S. 14A R.W.R. 8D TO THE AMOUNT OF RS. 13 , 55 , 80 , 00 0 / - AND I.T.A NO. 2044 /AHD/20 1 8 & CO NO. 82/AHD/2019 A.Y. 2015 - 16 PAGE NO DCIT VS. ADANI WILMAR LTD. 3 ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSING OFFICER HAS A LSO ADDED THIS AMOUNT DISALLOWED U/S. 14A TO THE BOOK PROFIT COMPUTED U/S. 115JB OF THE ACT. 3. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS DELETED BOTH THE ADDITIONS AFTER FOLLOWING THE FINDING OF HIS PREDECESSOR FOR AS SESSMENT YEAR 2014 - 15 IN THE CASE OF THE ASSESSEE ITSELF . 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS UNDISPUTED FACT THAT ASSESSEE HAS NEITHER EARNED ANY EX EMPT INCOME NOR CLAIMED ANY EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION. ON PERUSAL OF THE DECISION OF LD. CIT(A) , IT IS NOTICED THAT THE IMPUGNED ADDITION HAS BEEN DELETED HOLDING THAT ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME WHICH BASED ON SIMILAR FACTS DISCUSSED IN APPELLATE ORDER IN THE CASE OF THE ASSESSE E ITSELF FOR ASSESSMENT YEAR 2014 - 15 . W HILE DELETING THE AFORESAID ADDITION , THE LD. CIT(A) HAS ALSO PLACED RELIANCE ON THE DECISION OF HON BLE GUJARAT HIGH COURT IN THE CASE OF CORRTECK ENERGY PVT. LTD. 45 TAXMAN.COM 116 ON IDENTICAL DISALLOWANCE U/S. 14 A WHEREIN IT HAS BEEN HELD THAT WHERE THE ASSESSEE HAS NOT MADE CLAIM FOR EXEMPTION OF ANY INCOME FROM PAYMENT OF TAX NO DISALLOWANCE COULD BE MADE U/S. 14A OF THE ACT. IT IS FURTHER NOTICED THAT LD. CIT(A) HAS ALSO HELD THAT DISALLOW ANCE U/S. 14A DOES NOT CALL FOR ADDITION TO BO OK PROFIT U/S. 115JB OF THE ACT A FTER FOLLOWING THE DECISION OF SPECIAL BENCH OF ITAT DELHI IN THE CASE OF ACIT VS. VINEET INVESTMENT PVT. LTD. (2017) 82 TAXMAN.COM 4 15 (DELHI TRIB). IN THE ABOVE REFERRED DECISION OF SPECIAL BE NCH OF DELHI ITAT , IT IS HELD THAT EXPENDITURE INCURRED TO EXEMPT INCOME NOT TO BE ADDED FOR COMPUTING BOOK PROFIT U/S. 115JB OF THE I.T.A NO. 2044 /AHD/20 1 8 & CO NO. 82/AHD/2019 A.Y. 2015 - 16 PAGE NO DCIT VS. ADANI WILMAR LTD. 4 ACT. CONSIDERING THE ABOVE FACTS AND JUDICIAL FINDINGS, WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF LD. CIT( A), THEREFORE, BOTH THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. CROSS OBJECTION NO. 82/AHD/2019 5. CROSS OBJECTION FILED BY THE ASSESSEE IS NOT PRESSED, SO, THE SAME IS DISMISSED AS NOT PRESSED. 6. IN THE RESULT, THE APPEAL FILED BY REV ENUE AND CROSS OBJECTION FILED BY THE ASSESSEE BOTH ARE DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 20 - 02 - 20 20 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 20 /02 /2020 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,