Income Tax Officer, Ward-16(2), Hyderabad V. NSL Nagapatnam Private Limited, Hyderabad

ITA 1242/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2874 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Next Hearing Date: 09-06-2021
• Assessment Year: 2016-2017
• Appeal Filed On: 09-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 1242/HYD/2019 ASSESSMENT YEAR: 2016-17 INCOME TAX OFFICER, WARD-16(2), HYDERABAD VS M/S.NSL NAGAPATNAM POWER VENTURES PRIVATE LIMITED, HYDERABAD [PAN: AADCP9603L] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI ROHIT MUJUMDAR, DR FOR ASSESSEE : SHRI S.PHANINDRA, AR DATE OF HEARING : 09-06-2021 DATE OF PRONOUNCEMENT : 18-06-2021 O R D E R PER S.S.GODARA, J.M. : THIS REVENUES APPEAL FOR AY.2016-17 ARISES FROM THE CIT(A)-4, HYDERABADS ORDER DATED 24-05-2019 PASSED IN CASE NO.10205/2018-19/ITO,WD-16(2)/CIT(A)-4/HYD/19-20, I N PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961 [I N SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE REVENUE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: 1. THE CIT(A) ERRED IN DELETING THE DISALLOWANCE U /S.14A OF RS.3,50,43,635/-. ITA NO. 1242/HYD/2019 :- 2 -: 2. THE CIT(A) ERRED IN IGNORING CBDTS CIRCULAR NO. 5 OF 2014 DATED 11-02-2014. 3. THE CIT(A) ERRED IN IGNORING THE SUPREME COURT D ECISION IN THE CASE OF CIT VS. WALFORT SHARE OF STOCK BROKERS P.LTD (32 6 ITR 1), WHEREIN IT WAS HELD THAT THE MANDATE OF SECTION 14A WAS TO CUR B THE PRACTICE OF CLAIMING DEDUCTION OF EXPENSES INCURRED IN RELATION TO EXEMPT INCOME AGAINST TAXABLE INCOME AND AT THE SAME TIME AVAIL O F THE TAX INCENTIVE BY WAY OF EXEMPT INCOME WITHOUT MAKING ANY APPORTIO NMENT OF EXPENSES INCURRED IN RELATION TO EXEMPT INCOME. 3. AT THE OUTSET, LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT SINCE THERE IS NO DIVIDEND INCOME EARNED IN THE RELEVANT PREVIOUS YEAR THE CIT(A)S ORDER DELETING THE IMPUGNED DISALLOWANCE MAY BE UPHELD. IN THIS CONNEC TION, HE RELIED ON THE FOLLOWING CASE LAW: I. CIT VS. CHETTINAD LOGISTICS PVT. LTD., [80 TAXMANN.COM 221] (MADRAS); II. CIT VS. CORRTECH ENERGY PVT. LTD., [223 TAXMAN 130] (GUJ); III. CHEMINVEST LTD., VS. CIT (2015) [378 ITR 33] (DEL) THEIR LORDSHIPS HOLD THAT SECTION 14A READ WITH RULE 8 D APPLIES ONLY IN RELATION TO AN ASSESSEES EXEMPT INCOM E AND NOT OTHERWISE. WE THEREFORE SUSTAIN THE ORDER OF CIT(A) . 4. THIS REVENUES APPEAL IS DISMISSED IN ABOVE TERMS . ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JUNE, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.GO DARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 18-06-2021 TNMM ITA NO. 1242/HYD/2019 :- 3 -: COPY TO : 1.THE INCOME TAX OFFICER, WARD-16(2), HYDERABAD. 2.M/S.NSL NAGAPATNAM POWER VENTURES PRIVATE LIMITED , 8-2-684/2/A, 4 TH FLOOR, NSL ICON, ROAD NO.12, BANJARA HILLS, HYDERABAD. 3.CIT(APPEALS)-4, HYDERABAD. 4.PR.CIT-4, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.