DCIT CENTRAL CIRCLE-27, NEW DELHI V. .MONTAGE ENTERPRISE PVT LTD, NEW DELHI

ITA 10/DEL/2021

AI Insights

The case involves Montage Enterprises Pvt. Ltd. and the Assistant Commissioner of Income Tax (ACIT), Central Circle-27, New Delhi, concerning the Assessment Year 2016-17. The appeals arise from the order of the CIT(A)-29, New Delhi, which confirmed a disallowance under Section 14A read with Rules 8D amounting to Rs. 38,58,216 related to exempt income. The Tribunal also addressed the issue of whether Education Cess on Income Tax is an allowable business deduction, which was not pressed by the assessee. The Tribunal's decision relied on previous judgments and the absence of a specific satisfaction under Section 14A(2) by the Assessing Officer.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 38274 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2016-2017
• Appeal Filed On: 07-01-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH KUMAR YADAV
• Assessee Lawyers: M.P. RASTOGI
• Keywords: Retrospective amendment; Tax effect; Earning of tax free income
• Section: 14A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI Before Sh. Satbeer Singh Godara, Judicial Member & Sh. M. Balaganesh, Accountant Member ITA No. 1933/Del/2020 : Asstt. Year : 2016-17 Montage Enterprises Pvt. Ltd., 205, 2nd Floor, V-4, Mayur Plaza-2, Local Shopping Centre, Mayur Vihar, Phase-I, New Delhi-110091 Vs ACIT, Central Circle-27, New Delhi-110055 (APPELLANT) (RESPONDENT) PAN No. AACCM8173H ITA No. 10/Del/2021 : Asstt. Year : 2016-17 DCIT, Central Circle-27, New Delhi-110055 Vs Montage Enterprises Pvt. Ltd., C-53, Shashi Garden, Near Pocket-V, Gurudwara, Mayur Vihar, Phase-I, New Delhi-110091 (APPELLANT) (RESPONDENT) PAN No. AACCM8173H Assessee by : Sh. M. P. Rastogi, Adv. Revenue by : Sh. Akhilesh Kumar Yadav, Sr. DR Date of Hearing: 05.12.2024 Date of Pronouncement: 13.12.2024 ORDER Per Satbeer Singh Godara, Judicial Member: These assessee and Revenue cross appeal ITA No. 1933/Del/2020 and ITA No. 10/Del/2021, for Assessment Year 2016-17, arise against the CIT(A)-29, New Delhi’s order dated 22.10.2020 in case No. 162/2019-20, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “The Act”). 2. Heard both the parties at length. Case file perused. 3. We note at the outset that the Revenue cross appeal herein ITA No. 10/Del/2021 infact involves tax effect of ITA No. 1933/Del/2020 ITA No. 10/Del/2021 Montage Enterprises Pvt. Ltd. 2 Rs.53,25,779/- i.e. less than the minimum prescribed amount of Rs.60,00,000/- as per the CBDT latest circular no. 2/2024 dated 07.09.2024 admittedly made applicable with retrospective effect. We thus reject the Revenue’s instant appeal as involving lower than the above prescribed tax effect of Rs.60,00,000/- subject to all just exceptions. 4. We are now left with the assessee’s appeal ITA no. 1933/Del/2020 raising the following twin substantive grounds: “1. On the facts and in the circumstances of the case, the lower authority has erred in confirming disallowance to the extent of Rs.38,58,216/- u/s 14A read with Rules 8D. It is contended that Section 14A is not applicable in the case of the appellant. 2. That on the facts and circumstances of the case, the ld. CIT(Appeals) was not justified and grossly erred in not allowing deduction of Education Cess on Income Tax in computing total income under the normal provisions of the Act for the Assessment Years 2015-15 and 2016- 17.” 5. Learned counsel at the outset does not press for the assessee latter substantive ground raising the issue of education cess as an allowable business deduction. Rejected accordingly. 6. This leaves us with the assessee’s former issue of correctness of both the lower authorities action making section 14A r.w. Rules 8D disallowance of Rs.38,58,216/- relating to it’s exempt income. We note during the course of hearing that this is a recurring issue between the parties since A.Y. 2008-09 which formed subject matter of adjudication in this tribunal’s various orders. More particularly, the latest of them is dated 20.06.2024 in assessee’s appeal ITA No. 7443/Del/2017 for A.Y. 2014-15 holding therein that such a disallowance is not sustainable in absence of any section 14A(2) satisfaction ITA No. 1933/Del/2020 ITA No. 10/Del/2021 Montage Enterprises Pvt. Ltd. 3 having drawn by the Assessing Officer qua its books of account. That being the undisputed case from the Revenue side as well, we adopt judicial consistency to accept the assessee’s instant foremost substantive ground in very terms. This assessee’s appeal ITA No. 1993/Del/2020 is partly allowed therefore. Necessary computation shall follow as per law. 6.1 No other ground or arguments has been pressed before us. 7. To sum up, this assessee’s appeal ITA No. 1933/Del/2020 is partly allowed and the Revenue cross appeal ITA No. 10/Del/202 is dismissed in above terms. A copy of this common order be placed in the respective case files. Order Pronounced in the Open Court on 13/12/2024. Sd/- Sd/- (M. Balaganesh) (Satbeer Singh Godara) Accountant Member Judicial Member Dated: 13/12/2024 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR "