D.C.I.T., CC- 1(2), KOLKATA, KOLKATA V. M/S. CALCUTTA SPRINGS LTD., KOLKATA

MA 43/KOL/2024

AI Insights

The case involves the Deputy Commissioner of Income Tax (DCIT), CC-1(2), Kolkata as the appellant and M/s Calcutta Springs Ltd as the respondent. The dispute centered on the disallowance under section 14A read with section 115JB of the Income Tax Act, concerning the assessment year 2014-15. The Income Tax Appellate Tribunal (ITAT) had previously set aside the addition made on this issue, directing the Assessing Officer to re-examine it. Subsequently, the revenue filed a miscellaneous application seeking rectification of the Tribunal's order, which led to the confirmation of the disallowance to the extent of the exempt income claimed by the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360962 (ITAT-KOLKATA)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2014-2015
• Other Referred Cases: PCIT vs. M/s Era Infrastructure (India) Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Rectification of order; Earning of tax free income
• Section: 143(3); 154; 14A; 115JB

Judgement Text

" आयकर अपीलȣय अͬधकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Sonjoy Sarma, Judicial Member M.A. No.43/Kol/2024 (Arising out of I.T.A. No.768/Kol/2022) Assessment Year: 2014-15 DCIT, CC-1(2), Kolkata …………………………..……..…..........……….Appellant vs. M/s Calcutta Springs Ltd………..................…………........……...…..…..Respondent C/o M/s Salarpuria Jajodia & Co., 7, C. R. Avenue, 3rd Floor, Kolkata – 7000072. [PAN: AAACC9765H] Appearances by: Shri Sailen Samadder, Addl. CIT, Sr. DR, appeared on behalf of the appellant. Shri S. Jhajaria, FCA, appeared on behalf of the Respondent. Date of concluding the hearing : February 21, 2025 Date of pronouncing the order : May 22, 2025 ORDER Per Sonjoy Sarma, Judicial Member: The instant miscellaneous application has been filed by the revenue u/s 254(2) of the Income Tax Act (hereinafter referred to as the ‘Act’) rectifying an order passed by the Tribunal in ITA No.768/Kol/2022 dated 22.02.2024 for assessment year 2014-15 arising out of the order u/s 154 of the Act dated 01.02.2022 framed by ACIT, Central Circle-1(2), Kolkata. 2. The contention of the revenue in the miscellaneous application is that the Tribunal while passing its earlier order dated 11.07.2023 in ITA No.767/Kol/2022 for the assessment year 2014-15 arising out of order u/s 143(3) of the Act dated 29.09.2016 dealt with an identical M.A. No.43/Kol/2024 Assessment Year: 2014-15 M/s Calcutta Springs Ltd 2 issue relating to disallowance u/s 14A r.w.s. 115JB of the Act and in that case, the addition made on the issue relating to book profit was set aside to the file of the Assessing Officer with a direction to re-examine the issue afresh. The revenue also stated that in consequence to direction of the Tribunal’s effect order u/s 254 of the Act was passed on 30.01.2024 by determining the total disallowance u/s 14A of the Act r.w.r 8D of the I.T. Rules to Rs.2,78,191/-. 3. Per contra, the ld. AR submitted that the Tribunal has already examined all records and facts placed before it and while deciding the issue relied on the judgment of the Hon’ble Delhi High Court as in the case of PCIT vs. M/s Era Infrastructure (India) Ltd. in ITA No.204 of 2022 and deleted the disallowance u/s 14A of the Act. In that case, it was held that where there is no exempt income, there is no justification for making an adjustment u/s 14A of the Act while computing book profit u/s 115JB of the Act. He also stated that consequent to the direction of the Tribunal’s effect order u/s 254 dated 30.01.2024 was never brought on record at the time of hearing. However, during the time of hearing, the ld. AR agreed that the disallowance u/s 14A has to be restricted only to the amount of exempt income claimed by the assessee i.e. Rs.2,78,191/-. 4. We, after hearing the rival submissions of both the parties and perusing the materials available on record, find that the Tribunal while passing its order in ITA No.768/Kol/2022 dated 22.02.2024 for assessment year 2014-15 had thoroughly examined the factual matrix of the case and had discussed the legal position in detail. The Tribunal passed its order after relying on the judgment of the Hon’ble Delhi High Court as in the case of PCIT vs. M/s Era Infrastructure (India) Ltd. (supra) and held that no adjustment u/s 14A of the Act is permissible where there is no exempt income and there is no justification for M.A. No.43/Kol/2024 Assessment Year: 2014-15 M/s Calcutta Springs Ltd 3 computing book profit u/s 115JB of the Act. Moreover, consequent to Tribunal’s earlier effect order dated 30.01.2024 whereby the computation of total disallowance u/s 14A of the Act r.w.s. 8D to Rs.2,78,191/- was never brought on record by the revenue at the time of hearing of the case. However, from the contention made by the ld. DR and going through the facts, we find that while giving effect to the order of the Tribunal in ITA NO.767/Kol/2022, the Assessing Officer passed a rectification order u/s 254 dated 30.01.2024, wherein, the disallowance u/s 14A was correctly restricted to Rs.2,78,191/- to the extent of exempt income declared by the assessee. Since the assessee has no objection to the disallowance restricted to the amount of exempt income and the revenue seeks rectification consistent with the said figure, therefore, we find merit in the miscellaneous application. In view of the above and in consequence with the Tribunal’s order, the miscellaneous application filed by the revenue is allowed and the disallowance u/s 14A is confirmed to the extent of Rs.2,78,191/-. Accordingly, ITA No.768/Kol/2022 is hereby modified in the above lines of the order. 5. In the result, the miscellaneous application of the revenue is allowed. Kolkata, the 22nd May, 2025. Sd/- Sd/- [Rajesh Kumar] [Sonjoy Sarma] लेखा सदèय/Accountant Member ÛयाǓयक सदèय/Judicial Member Dated: 22.05.2025. RS Copy of the order forwarded to: 1. DCIT, CC-1(2), Kolkata 2. M/s Calcutta Springs Ltd 3.CIT(A)- 4. CIT- , M.A. No.43/Kol/2024 Assessment Year: 2014-15 M/s Calcutta Springs Ltd 4 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches "