ACIT 18(1), MUMBAI V. CIG REALTY FUND, MUMBAI

ITA 1197/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1035 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 07-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DES
• Assessee Lawyers: MRUGAKSHI K JOSHI
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI MANOJ KUMAR AG G ARWAL, HON'BLE ACCOUNTANT MEMBER ITA NO . 1197 /MUM/201 6 (A.Y: 2011 - 12 ) THE ASSISTANT COMMISSIONER OF INCOME TAX 1 8 (1) ROOM NO . 202 , 2 ND FLOOR EARNEST HOUSE, NARIMAN POINT MUMBAI 400 021 V . M/S. CIG REALTY FUND C/O D.M. HARISH & CO., 305 - 309, NILKANTH 98, MARINE LINES, MUMBAI 400 002 PAN : AAATC 7307 E (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. MRUGAKSHI K. JOSHI DEPARTMENT BY : SHRI SAURABH DESPANDE DATE OF HEARING : 02 .01.2018 DATE OF PRONOUNCEMENT : 02 .01.2018 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD.CIT(A) - 29, MUMBAI DATED 11.12.2015 IN DELETING THE DISALLOWANCE MADE U/S. 14A R.W. RULE 8D OF THE I.T. RULES. 2. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT DURING THIS ASSESSMENT YEAR THE ASSESSEE HA D NOT EARNED ANY EXEMPT INCOME AND THEREFORE THERE SHOULD NOT BE ANY DISALLOWANCE U/S. 14A R.W. 2 ITA NO.1197/MUM/2016 (A.Y: 2011 - 12) M/S. CIG REALTY FUND RULE 8D. LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT LD.CIT(A) FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. HOLICIM INDIA P. LTD. [90 CCH 0081] HELD THAT IF THERE IS NO DIVIDEND INCOME EARNED BY THE ASSESSEE , SECTION 14A CANNOT BE INVOKED. LD. COUNSEL FOR THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CHEM I NVEST LIMITED V. CIT [378 I TR 33] AND SUBMITS THAT SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE DELHI HIGH COURT THAT IF NO DIVIDEND INCOME IS EARNED THERE SHOULD NOT BE ANY DI SALLOWANCE U/S. 14A OF THE ACT. 3. LD.DR STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE BEFORE US IS WHETHER THERE CAN BE ANY DISALLOWANCE U/S. 14A R.W. RULE 8D , IF THERE IS NO EXEMPT INCOME EARNED BY THE ASSESSEE DURING THE ASSESSMENT YEAR. WE FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PCIT V . BALLARPUR INDUSTRIES LTD. IN ITA.NO. 51 OF 2016 DATED 13.10.2016 FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CHEM I NVEST LIMITED V. CIT (SUPRA) HELD THAT PROVISIONS OF SECTION 14A WOULD NOT BE APPLICA BLE IN THE ABSENCE OF ANY DIVIDEND/EXEMPT INCOME EARNED BY THE ASSESSEE DURING THE ASSESSMENT YEAR . 3 ITA NO.1197/MUM/2016 (A.Y: 2011 - 12) M/S. CIG REALTY FUND 5. IN THE CASE OF DISH TV INDIA LTD. V. ACIT [167 ITD 412] FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I T HAS BEEN HELD A S UNDER: 11. AFTER HEARING THE RIVAL SUBMISSIONS AND GOING THROUGH T HE ORDER OF THE TAX AUTHORITIES BELOW WE NOTED THAT THE ASSESSEE HAS NOT EARNED ANY EXEMPT DIVIDEND INCOME DURING THE IMPUGNED ASSESSMENT YEAR. SINCE THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME NO DISALLOWANCE UNDER SECTION 14A OF THE INCOME TAX ACT CAN BE MADE IN VIEW OF THE DECISION IN THE CASE OF PR . CIT V. BALLARPUR INDUSTRIES LTD. [IT APPEAL NO. 51 OF 2016, DATED 13 - 10 - 2016] IN WHICH THE HON'BLE JURISDICTIONAL HIGH COURT, FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD. V. CIT [2015] 378 ITR 33 / 234 TAXMAN 761 / 61 TAXMANN.COM 118 TOOK THE VIEW THAT PROVISIONS OF SECTION 14A OF THE INCOME TAX ACT, 1961 WOULD NOT APPLY TO THE FACTS OF THE CASE AS NO EXEMPT INCOME WAS RECEIVED OR RECEIVABLE DURING THE RELEVANT PREVIOUS YEAR BY THE ASSESSEE. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. SHIVAM MOTORS (P) LTD. [2015] 230 TA XMAN 63 / 55 TAXMANN.COM 262 (ALL.) AND THAT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V. WINSOME TEXTILE INDUSTRIES [2009] 319 ITR 204. 6. RESPECTFULLY FOLLOWING THE SAID DECISIONS, WE UPHOLD THE ORDER OF THE LD.CIT(A) IN DELETING THE DISAL LOWANCE MADE U/S. 14A R.W. RULE 8D OF THE I.T. RULES. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRON OUNCED IN THE OPEN COURT ON THE 02 ND JANUARY, 2018 . SD/ - SD/ - ( MANOJ KUMAR AG G ARWAL ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 02 / 0 1/2018 GIRIDHAR , SPS 4 ITA NO.1197/MUM/2016 (A.Y: 2011 - 12) M/S. CIG REALTY FUND COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM