Dy.Commissioner of Income Tax, Circle-16(2), Hyderabad V. Med Plus Health Services Private Limited, Hyderabad

ITA 1429/Hyd/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2695 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 10-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SURESH BABU
• Assessee Lawyers: LAXMI PAWAN
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

ITA NO 1429 OF 2017 MEDPLUS HEALTH SERVICES P LTD HYDERABAD. PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.1429/HYD/2017 (ASSESSMENT YEAR: 2012-13) DCIT, CIRCLE 16 ( 2 ) HYDERABAD VS M/S. MEDPLUS HEALTH SERVICES P. LTD HYDERABAD PAN: AAECM 9412 H (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI B. SURESH BABU, DR FOR ASSESSEE : SHRI LAXMI PAWAN O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS REVENUES APPEAL FOR THE A.Y 2012-13. IN TH IS APPEAL, THE REVENUE IS AGGRIEVED BY THE ORDER OF TH E LEARNED CIT (A)-3, HYDERABAD, DATED 23.04.2015. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE CIT(A) ERRED IN DELETING THE DISALLOWANCE U/S 14A OF RS. 60,73,756/-. 2. THE CIT(A) ERRED IN IGNORING CBDT'S CIRCULAR NO. 5 OF 2014 DATED: 11-02-2014. 3. THE CIT(A) ERRED IN IGNORING THE SUPREME COURT DECISION IN THE CASE OF CIT VS. WALFORT SHARE OF STOCK BROKERS P LTD [326 ITR 1], WHEREIN IT WAS HELD THAT THE MANDATE OF SECTION L4A WAS TO CURB THE PRACTICE OF CLAIMING DEDUCTION OF EXPENSES DATE OF HEARING: 25.01 . 2018 DATE OF PRONOUNCEMENT: 25.01.2018 ITA NO 1429 OF 2017 MEDPLUS HEALTH SERVICES P LTD HYDERABAD. PAGE 2 OF 3 INCURRED IN RELATION TO EXEMPT INCOME AGAINST TAXABLE INCOME AND AT THE SAME TIME AVAIL OF THE TAX INCENTIVE BY WAY OF EXEMPT INCOME WITHOUT MAKING ANY APPORTIONMENT OF EXPENSES INCURRED IN RELATION TO EXEMPT INCOME. 2. BRIEF FACTS ARE THAT THE ASSESSEE COMPANY WHICH IS IN THE BUSINESS OF WHOLESALE TRADING IN PHARMACEUTICAL S, MEDICINES, GENERAL STORES AND ITS RELATED ITEMS AND RUNNING OF CLINICS AND PATHOLOGICAL SERVICES, FILED ITS RETURN OF INCOME F OR THE A.Y 2012- 13 ON 30.09.2012 DECLARING A LOSS OF RS.2,38,03,445 . DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE A O OBSERVED THAT THE ASSESSEE HAS MADE INVESTMENT OF 139,47,51, 280 AS ON 31.03.2012. HE THEREFORE, PROPOSED TO MAKE A DISALL OWANCE U/S 14A OF THE ACT. THE ASSESSEE SUBMITTED THAT NO EXPE NDITURE HAS BEEN INCURRED BY IT IN RELATION TO THE INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. HOWEVER, THE AO MADE DISA LLOWANCE U/S 14A R.W.RULE 8D OF IT RULES AND MADE A CONSEQUENTIA L ADDITION OF RS.60,73,756. 3. AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE T HE CIT (A) WHO GRANTED RELIEF TO THE ASSESSEE HOLDING THAT WHERE THE ASSESSEE HAS NOT EARNED ANY INCOME, THERE CAN BE NO DISALLOWANCE U/S 14A OF THE ACT. THE CIT (A) HAS FO LLOWED THE DECISION OF COORDINATE BENCH OF ITAT IN THE CASE OF PRATHISTA INDUSTRIES LTD VS. DCIT IN ITA NO.1302/HYD/2015 FOR THE A.Y 2011-12 WHEREIN FOLLOWING THE DECISION OF THE HON'B LE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD REPORTED IN (20 15) 378 ITR 33 (DEL.). AGGRIEVED BY THE RELIEF GRANTED BY THE C IT (A), THE REVENUE IS IN APPEAL BEFORE US. ITA NO 1429 OF 2017 MEDPLUS HEALTH SERVICES P LTD HYDERABAD. PAGE 3 OF 3 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE DECISION OF THE CIT (A) IS IN CONSONANCE WITH THE DECISIONS OF THE COORDINATE BENCHES OF THI S TRIBUNAL IN VARIOUS CASES AND ALSO THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD (CITED SUPRA). THEREFORE, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CI T (A) AND ACCORDINGLY THE REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2018. SD/- SD/- (B.RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 25 TH JANUARY 2018. VINODAN/SPS COPY TO: 1 DCIT, CIRCLE 16(2) 2 ND FLOOR,B BLOCK, IT TOWERS, AC GUARDS, MASAB TANK, HYDERABAD 2 M/S. MEDPLUS HEALTH SERVICES P LTD, 5-9-13, F.NO. 707, 7 TH FLOOR, TARAMANDAL COMPLEX, SAIFABAD, HYDERABAD 3 CIT (A)-4 HYDERABAD 4 PR. CIT 4 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER