HOLLYFIELD TRADERS PVT. LTD.,NORTH TWENTY FOUR PARGANAS V. CIT(A), KOLKATA

ITA 128/KOL/2025

AI Insights

The case involves an appeal by Hollyfield Traders Private Limited against the order of the CIT(A), Kolkata-27, which pertained to the disallowance made under Section 14A of the Income Tax Act. The assessee contested the disallowance amounting to Rs.10,90,605, arguing that it should be limited to the exempt income of Rs.2,75,000 earned during the assessment year 2017-2018. The Tribunal considered the submissions and the legal precedents, particularly the Supreme Court's decision in the State Bank of Patiala case, which supported the assessee's position. The revenue's objection was noted but did not alter the Tribunal's decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 706895 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 16-01-2025
• Other Referred Cases: State Bank of Patiala vs. [2018] 99 taxmann.com 286, Caraf Builders & Constructions (P) Ltd. vs. [2019] 112 taxmann.com 322(SC)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MADHUMITA DAS
• Assessee Lawyers: AYUSH KEDIA
• Keywords: Earning of tax free income

Judgement Text

" आयकर अपीलीय अधिकरण, “एस.एम.सी” न्यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA श्री जाजज माथन, न्याययक सदस्य क े समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER आयकर अपील सं/ITA No.128/KOL/2025 (नििाारण वर्ा / Assessment Year :2017-2018) Hollyfield Traders Private Limited EN-28, Sector-V, Bidhannagar, Salt Lake City, North 24 Parganas West Bengal-700091 Vs CIT(A), Kolkata-27 PAN No. : AAACH 8293 D (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri Ayush Kedia, AR राजस्व की ओर से /Revenue by : Smt. Madhumita Das, Sr.DR सुनवाई की तारीख / Date of Hearing : 10/07/2025 घोषणा की तारीख/Date of Pronouncement : 10/07/2025 आदेश / O R D E R This is an appeal filed by the assessee against the order of the ld. CIT(A), Kolkata-27, dated 24.08.2024 for the Assessment Year 2017-2018. 2. Shri Ayush Kedia, ld.AR appeared on behalf of the assessee and Smt. Madhumita Das, ld. Sr.DR appeared on behalf of the revenue. 3. The appeal of the assessee is barred by 77 days. In this regard, the assessee has filed affidavit stating sufficient reasons for condonation of delay, which are also not found to be false. Ld. Sr. DR also did not raise any serious objection. Accordingly, the delay of 77 days in filing the appeal is condoned and the appeal is admitted for hearing. 4. It was the submission by the ld. AR that the only issue in the appeal of the assessee is in respect of the disallowance u/s.14A of the Act made by the AO. It was the submission the assessee had earned exempt income ITA No.128/KOL/2025 2 to an extent of Rs.2,75,000/- during the impugned assessment year. It was the submission that the AO had computed the disallowance u/s.14A f the Act at Rs.10,90,605/-. It was the submission that the only prayer of the assessee is that the disallowance u/s.14A of the Act may be restricted to the exempt income as earned by the assessee. It was the submission that the issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of State Bank of Patiala, reported in [2018] 99 taxmann.com 286 wherein the Hon’ble Supreme Court confirmed the view taken by the Hon’ble Punjab & Haryana High Court of restricting the disallowance to the quantum of exempt income. The ld. AR has also relied upon the decision of the Hon’ble Supreme Court in the case of Caraf Builders & Constructions (P) Ltd., reported in [2019] 112 taxmann.com 322(SC). 5. In reply, ld. Sr. DR vehemently relied on the order of the ld. CIT(A). It was the submission that the revenue’s SLP in the case of India Bulls on the issue is pending before the Hon’ble Supreme Court. 6. I have considered the rival submissions. A perusal of the facts and circumstances of the case shows that the issue in this appeal is squarely covered by the decision of the Hon’ble Supreme Court in the case of State Bank of Patiala, reported in [2018] 99 taxmann.com 286, therefore, the AO is directed to restrict the disallowance u/s.14A of the Act to the amount of the exempt income as earned by the assessee. ITA No.128/KOL/2025 3 7. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 10/07/2025. Sd/- (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 10/07/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशािुसार/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलाथी / The Appellant- 2. प्रत्यथी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ज फाईल / Guard file. सत्यापपत प्रयत //True Copy// "