M/s. Milkfood Ltd., New Delhi V. DCIT, New Delhi

ITA 1183/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6264 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA SENIOR
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH E EE E : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT G.D. AGRAWAL, VICE PRESIDENT AND AND AND AND SMT. BEENA A. PILLAI SMT. BEENA A. PILLAI SMT. BEENA A. PILLAI SMT. BEENA A. PILLAI, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO . .. . 1183/DEL/2014 1183/DEL/2014 1183/DEL/2014 1183/DEL/2014 ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : ASSESSMENT YEAR : 2009 2009 2009 2009 - -- - 10 1010 10 M/S MILKFOOD LIMITED, M/S MILKFOOD LIMITED, M/S MILKFOOD LIMITED, M/S MILKFOOD LIMITED, 5 55 5 TH THTH TH FLOOR, BHANDARI HOUSE, FLOOR, BHANDARI HOUSE, FLOOR, BHANDARI HOUSE, FLOOR, BHANDARI HOUSE, 91, 91, 91, 91, NEHRU PLACE, NEHRU PLACE, NEHRU PLACE, NEHRU PLACE, NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. PAN : AAACM5913B. PAN : AAACM5913B. PAN : AAACM5913B. PAN : AAACM5913B. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -6(1), 6(1), 6(1), 6(1), NEW DELHI. NEW DELHI. NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R.S. SINGHVI, CA. RESPONDENT BY : SHRI P. DAM KANUNJNA, SENIOR DR. DATE OF HEARING : 21.03.2016 21.03.2016 21.03.2016 21.03.2016 DATE OF PRONOUNCEMENT : 29.03.2016 29.03.2016 29.03.2016 29.03.2016 ORDER ORDER ORDER ORDER PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP PER G.D. AGRAWAL, VP : :: :- -- - THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEA R 2009-10 IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A)-IX, NE W DELHI DATED 22 ND JANUARY, 2014. 2. THE GROUNDS RAISED IN THIS APPEAL BY THE ASSESSE E READ AS UNDER:- 1(I) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CIT(A) WAS NOT JUSTIFIED IN CONFIRMING DISALLOWANCE OF RS.16,03,821/- UNDER RULE 8D EVEN THOUGH THERE IS N O CASE OF ANY EXPENDITURE RELATING TO EXEMPT INCOME ON ANY SUCH FINDING BY THE ASSESSING OFFICER IN THE CONTEXT OF PROVISIONS OF SEC. 14A OF THE INCOME TAX ACT, 1961. (II) THAT IN THE ABSENCE OF ANY FINDING REGARDING A NY SUCH EXPENDITURE IN THE CONTEXT OF PROVISIONS OF SE C. 14A(2) & (3) OF THE INCOME TAX ACT, 1961, THERE IS NO FACT UAL OR LEGAL BASIS FOR ANY DISALLOWANCE. ITA-1183/DEL/2014 2 2. THAT IN THE ALTERNATIVE DISALLOWANCE IS HIGHLY ARBITRARY AND EXCESSIVE. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D HAVE PERUSED THE MATERIAL PLACED BEFORE US. WE FIND THA T THE IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE ITAT IN ASSESSEES OWN C ASE FOR ASSESSMENT YEAR 2007-08 VIDE ITA NO.3298/DEL/2012. IN THE SAID ORDER, THE CIT(A) HAD ALLOWED RELIEF TO THE ASSESSE E AND THE REVENUE WAS IN APPEAL AGAINST THE ORDER OF CIT(A). THE ITA T UPHELD THE ORDER OF THE CIT(A) WITH THE FOLLOWING FINDING:- 5. LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSE SSEE HAD NOT EARNED ANY EXEMPT INCOME DURING THE YEAR. THEREFORE, IN ANY VIEW OF THE MATTER, NO DISALLOWAN CE COULD BE MADE U/S 14A. IN THIS REGARD, LD.COUNSEL HAS RE LIED ON FOLLOWING DECISIONS: - HONBLE DELHI HIGH COURTS DECISION DATED 5-9-2014 (ITA NOS.486/2014 & ITA NO.299/2014) IN THE CASE OF CIT VS. HOLCIM INDIA P.LTD. - HONBLE PUNJAB & HARYANA HIGH COURTS DECISION IN C IT VS. M/S LAKHANI MARKETING INCL. (ITA NO.970/2008 DECIDE D ON 2- 4-2014). - HONBLE PUNJAB & HARYANA HIGH COURTS DECISION IN C IT VS. HERO CYCLES LTD. 323 ITR 518; AND - HONBLE PUNJAB & HARYANA HIGH COURTS DECISION IN C IT VS. WINSOME TEXTILE INDUSTRIES LTD. 319 ITR 204. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE AFOREMENTIONED DECISIONS, RELIED UPON BY THE ASSESS EE, WHEREIN A CONSISTENT VIEW HAS BEEN TAKEN THAT WHERE NO EXEMPT INCOME IS EARNED, THERE COULD NOT BE ANY DISALLOWANCE U/S 14A, WE FIND NO MERIT IN THE GROUN D TAKEN BY THE REVENUE. ACCORDINGLY, GROUND NO.1 IS DISMIS SED. 4. IN THE YEAR UNDER CONSIDERATION ALSO, THERE IS N O DIVIDEND INCOME. THEREFORE, RELYING UPON THE ABOVE DECISION OF ITAT AND ALSO THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CAS E OF CIT VS. HOLCIM INDIA P. LTD. VIDE ITA NO.486/2014, ORDER DATED 5 TH SEPTEMBER, 2014, ITA-1183/DEL/2014 3 WE HOLD THAT SINCE THERE IS NO EXEMPT INCOME, NO DI SALLOWANCE U/S 14A COULD BE MADE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 29.03.2016 . SD/- SD/- (BEENA A. PILLAI (BEENA A. PILLAI (BEENA A. PILLAI (BEENA A. PILLAI ) )) ) ( (( ( G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL G.D. AGRAWAL ) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. COPY FORWARDED TO: - 1. APPELLANT : M/S MILKFOOD LIMITED, M/S MILKFOOD LIMITED, M/S MILKFOOD LIMITED, M/S MILKFOOD LIMITED, 5 55 5 TH THTH TH FLOOR, BHANDARI HOUSE, FLOOR, BHANDARI HOUSE, FLOOR, BHANDARI HOUSE, FLOOR, BHANDARI HOUSE, 91, NEHRU PLACE, NEW DELHI. 91, NEHRU PLACE, NEW DELHI. 91, NEHRU PLACE, NEW DELHI. 91, NEHRU PLACE, NEW DELHI. 2. RESPONDENT : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -6(1), NEW DELHI. 6(1), NEW DELHI. 6(1), NEW DELHI. 6(1), NEW DELHI. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR