UB Infrastructure Projects Limited, V. DCIT, Bangalore

ITA 1210/BANG/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8448 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BIJU JCITITATDR BENGALURU
• Assessee Lawyers: K R PRADEEP
• Keywords: Principle of natural justice; Earning of tax free income
• Section: 234B; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ITA NO.1210/BANG/2016 ASSESSMENT YEAR : 2010-11 UB INFRASTRUCTURE PROJECTS LTD., UB TOWERS, LEVEL 12, UB CITY, 24, VITTAL MALLYA ROAD, BANGALORE 560 001. PAN: AAACU 2311H VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7(1)(1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI K.R. PRADEEP, CA RESPONDENT BY : SHRI M.K. BIJU, JCIT(ITAT-3)(DR), BENGALURU DATE OF HEARING : 28.03.2017 DATE OF PRONOUNCEMENT : 31.03.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINS T THE ORDER OF THE CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THAT THE ORDER OF THE ASSESSING OFFICER IN SO FAR AS IT IS AGAINST THE APPELLANT IS AGAINST THE LAW, FACTS, CI RCUMSTANCES, NATURAL JUSTICE, EQUITY, WITHOUT JURISDICTION, BAD IN LAW AND ALL OTHER KNOWN PRINCIPLES OF LAW. 2. THAT THE TOTAL INCOME COMPUTED AND THE TOTAL TA X COMPUTED IS HEREBY DISPUTED. ITA NO.1210/BANG/2016 PAGE 2 OF 4 3. THAT THE ORDER OF THE AUTHORITIES BELOW IS BASE D ON SURMISES, CONJECTURES, ASSUMPTIONS AND PRESUMPTIONS AND NOT BASED ON FACTS EMERGING FROM RECORDS AND HENCE REQU IRES TO BE VACATED ON THIS GROUND ALONE. 4. THAT THE LEARNED AUTHORITIES BELOW ERRED IN MAK ING DISALLOWANCE U/S 14A RWR 8D OF THE ACT AMOUNTING TO RS. 2,32,85,216/-. 5. THAT THE LEARNED AUTHORITIES BELOW ERRED IN NOT APPRECIATING THAT WHEN THERE IS NO TAX FREE INCOME, THERE CANNOT BE ANY EXPENDITURE INCURRED FOR EARNING EXEMPT INCO ME. 6. THAT THE LEARNED AUTHORITIES BELOW ERRED IN NOT FOLLOWING THE BINDING/RELEVANT DECISIONS OF THE HIGHER APPELL ATE AUTHORITIES ON THE ISSUE. 7. THE APPELLANT DENIES THE LIABILITY FOR INTEREST U/S 234B & 234C OF THE ACT. FURTHER PRAYS THAT INTEREST IF ANY SHOULD BE LEVIED ONLY ON THE RETURNED INCOME. 8. NO OPPORTUNITY HAS BEEN GIVEN BEFORE LEVY OF I NTEREST U/S 234B & 234C OF THE IT ACT. 9. WITHOUT PREJUDICE TO THE APPELLANT'S RIGHT OF S EEKING WAIVER BEFORE APPROPRIATE AUTHORITY THE APPELLANT B EGS FOR CONSEQUENTIAL RELIEF IN THE LEVY OF INTEREST U/S. 2 34B & 234C OF THE ACT. 10. FOR THE ABOVE AND OTHER GROUNDS AND REASONS W HICH MAY BE SUBMITTED DURING THE COURSE OF HEARING OF THIS A PPEAL, THE ASSESSEE REQUESTS THAT THE APPEAL BE ALLOWED AS PRA YED AND JUSTICE BE RENDERED. 2. THOUGH VARIOUS GROUNDS ARE RAISED, BUT THEY ALL RELATE TO THE DISALLOWANCE MADE U/S. 14A OF THE INCOME TAX ACT, 1 961 [THE ACT]. 3. DURING THE COURSE OF HEARING, THE LD. COUNSEL FO R THE ASSESSEE HAS INVITED OUR ATTENTION TO THE FACT THAT THE ASSESSEE HAS NOT RECEIVED ANY ITA NO.1210/BANG/2016 PAGE 3 OF 4 EXEMPTED DIVIDEND INCOME. THEREFORE, IN THE ABSENC E OF ANY EXEMPT INCOME, DISALLOWANCE US/. 14A IS NOT POSSIBLE. IN SUPPORT OF THIS CONTENTION, HE PLACED RELIANCE UPON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD. V. CIT, 378 ITR 33 (DEL) . IN ORDER TO DEMONSTRATE THAT ASSESSEE DOES NOT HAVE ANY EXEMPT INCOME, OUR ATTENTION WAS INVITED TO THE COPY OF THE PROFIT & L OSS ACCOUNT AND THE BALANCE SHEET WHICH IS AVAILABLE AT PAGES 27 TO 28 OF THE COMPILATION OF THE ASSESSEE. 4. THE LD. DR PLACED RELIANCE UPON THE ORDER OF THE CIT(APPEALS). 5. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES IN THE LIGHT OF RIVAL SUBMISSIONS AND THE JUDGMENTS REFERRED TO BY THE PARTIES, WE FIND THAT UNDISPUTEDLY THE ASSESSEE DOES NOT HAVE ANY EX EMPTED INCOME, THEREFORE DISALLOWANCE U/S. 14A OF THE ACT CANNOT B E MADE. WE HAVE ALSO EXAMINED THE JUDGMENT OF THE HONBLE DELHI HIGH COU RT IN WHICH THEIR LORDSHIPS HAVE CATEGORICALLY HELD THAT WHERE THE AS SESSEE HAD NOT EARNED ANY TAXABLE INCOME IN THE RELEVANT ASSESSMENT YEAR IN QUESTION, THEN THE CORRESPONDING EXPENDITURE COULD NOT BE WORKED OUT F OR DISALLOWANCE. THUS, NO DISALLOWANCE U/S. 14A OF THE ACT CAN BE MA DE IN THE YEAR IN WHICH NO EXEMPT INCOME HAD BEEN EARNED OR RECEIVED BY THE ASSESSEE. THE VIEW TAKEN BY THE HONBLE DELHI HIGH COURT HAS BEEN CONSISTENTLY FOLLOWED BY THE TRIBUNAL IN A SERIES OF CASES. IN THE LIGHT OF THESE FACTS, WE ARE OF THE VIEW THAT DISALLOWANCE U/S. 14A IS NOT SUSTAINA BLE. WE ACCORDINGLY SET ITA NO.1210/BANG/2016 PAGE 4 OF 4 ASIDE THE ORDER OF CIT(APPEALS) AND DELETE THE DISA LLOWANCE MADE U/S. 14A OF THE ACT. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF MARCH, 2017. SD/- SD/- ( S. JAYARAMAN ) (SUNIL KUMAR YA DAV ) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE, DATED, THE 31 ST MARCH, 2017. / D ESAI S MURTHY / COPY TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.