Tarini Steel Company Ltd, Pune V. Deputy Commissioner of Income-tax, Circle - 10, Pune

ITA 13/PUN/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1041 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 04-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 13/PUN/2018 ASSESSMENT YEAR : 2012-13 TARINI STEEL COMPANY LTD., 101, GENERAL BLOCK, MIDC, TELCO ROAD, BHOSARI, PUNE 411 026 PAN : AAACT6346H VS. DCIT, CIRCLE-10, PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-6, PUNE ON 29-09-2017 IN RELATION TO THE ASSESSMENT YEAR 2012-13. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.2,13,600/- MADE U/S.14 A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT). 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSE E FILED THE RETURN DECLARING TOTAL INCOME OF RS.5.38 CRORE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT TH E ASSESSEE HAD MADE INVESTMENTS IN SHARES OF ZION STEEL LTD. AND ASSESSEE BY NONE REVENUE BY SHRI MAHADEVAN A.M. KRISHNAN DATE OF HEARING 21-12-2020 DATE OF PRONOUNCEMENT 21-12-2020 ITA NO.13/PUN/2018 TARINI STEEL COMPANY LTD., 2 MADHUR ENGINEERS PVT. LTD. AMOUNTING TO RS.4,27,20,000/-. ON BEING CALLED UPON TO EXPLAIN AS TO WHY NO DISALLOWANCE U/S.14A OF THE ACT WAS OFFERED, THE ASSESSEE SUBMITTED THAT NO DIVIDEND INCOME WAS EARNED ON THESE INVESTMENTS. NOT CONVINCED, TH E ASSESSING OFFICER COMPUTED THE DISALLOWANCE U/S.14A AT RS.2,13,600/-, WHICH CAME TO BE COUNTENANCED IN THE FIRS T APPEAL. 4. WE HAVE HEARD THE LD. DR THROUGH VIRTUAL COURT AND GON E THROUGH THE RELEVANT MATERIAL ON RECORD. THERE IS NO APPE ARANCE FROM THE SIDE OF THE ASSESSEE DESPITE NOTICE. IT IS SEEN A S AN ADMITTED POSITION THAT THE ASSESSEE DID NOT EARN ANY EXEMPT INC OME FROM THE SHARES. DESPITE THAT, THE AO HAS COMPUTED THE DISALLOWANCE U/S.14A TO THE TUNE OF RS.2,13,600/-. T HE HON'BLE DELHI HIGH COURT IN CHEMINVEST LTD. VS. CIT (2015) 378 ITR 33 (DEL) HAS HELD THAT IF THERE IS NO EXEMPT INCOME, THERE CAN BE NO QUESTION OF MAKING ANY DISALLOWANCE U/S 14A OF THE ACT. SI MILAR VIEW HAS BEEN TAKEN BY THE HON'BLE DELHI HIGH COURT IN CIT VS. HOLCIM INDIA P. LTD. (2014) 90CCH 081-DEL-HC . MORE RECENTLY THE HONBLE JURISDICTIONAL HIGH COURT IN PR. CIT VS. KOHINOOR PROJECTS PVT. LTD. (2020) 425 ITR 700 (BOM) HAS HELD THAT IN THE ABSENCE OF ANY EXEMPT INCOME, THERE CANNOT BE ANY DISALLOW ANCE ITA NO.13/PUN/2018 TARINI STEEL COMPANY LTD., 3 OF EXPENSES U/S 14A OF THE ACT. AS THE ASSESSEE IN TH E INSTANT CASE DID NOT ADMITTEDLY EARN ANY EXEMPT INCOME, RESPECTFULLY FOLLOW ING THE PRECEDENT, WE HOLD THAT NO DISALLOWANCE WAS CALLED FOR. THE IMPUGNED ORDER IS OVERTURNED AND THE SUSTENANCE OF THE DISALLOWANCE IS DELETED. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2020. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 21 ST DECEMBER, 2020 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-6, PUNE 4. 5. THE PR.CIT-5, PUNE , , / DR B, ITAT, PUNE 6. / GUARD FILE / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.13/PUN/2018 TARINI STEEL COMPANY LTD., 4 DATE 1. DRAFT DICTATED ON 21-12-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 21-12-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *