BCD TRAVELS INDIA P.LTD, MUMBAI V. DCIT 9(2)(1) EARLIER ADDL CIT 8(1), MUMBAI

ITA 1521/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8378 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 28-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BRIJMOHAN PURANMAL AGARWAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL H, BENCH MUM BAI , , , BEFORE SHRI RAJENDRA, AM AND SHRI RAM LAL NEGI, JM ./ ITA NO.1521/MUM/2015 ( / ASSESSMENT YEAR: 2009-10) M/S. BCD TRAVELS INDIA PVT. LTD., LEVEL 2, OFFICE NO.- 3B, B WING, TIMES SQUARE, ANDHERI KURLA ROAD, MAROL, ANDHERI (EAST), MUMBAI- 400059 VS. THE DY. COMMISSIONER OF INCOME TAX, RANGE- 9(2) (1), EARLIER ADDL. CIT-8 (1), AAYAKAR BHAVAN, MUMBAI - 400012 ! ./ ' ./ PAN/GIR NO. : AAACF1613R ( !# / APPELLANT ) ) ( $%!# / RESPONDENT ) & '( /ASSESSEE BY : SHRI. BRIJMOHAN PURANMAL AGARWAL( AR) /REVENUE BY : SHRI. M.C.OMI NINGSHEN(DR) ) * + ( , / DATE OF HEARING : 20/02/2017 -./0 + ( , / DATE OF PRONOUNCEMENT 23/02/2017 !' / O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGA INST ORDER DATED 14/11/2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-16, MUMBAI PERTAINING TO ASSESSMENT YEAR 2009-10, WHERE BY THE LD. CIT (A) DISMISSED THE APPEAL FILED BY THE ASSESSEE AGAI NST ASSESSMENT ORDER PASSED U/S 143 (3) OF THE INCOME TAX ACT, 196 1 (FOR SHORT THE ACT). 2 ITA NO. 1521/MUM/2015 ASSESSMENT YEAR: 2009-10 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR DECLARING T HE TOTAL INCOME OF RS. 1,02,67,029/- AFTER CLAIMING DEDUCTION U/S 10A AMOUNTING TO RS. 1,60,06,372/-. THE RETURN WAS PROCESSED AND AFTER S CRUTINY ASSESSMENT ORDER WAS PASSED DETERMINING THE TOTAL I NCOME OF RS. 1,27,59,890/- AFTER MAKING ADDITIONS INCLUDING DISA LLOWANCE U/S 14A OF THE ACT. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT (A), IN APPEAL AND CHALLENGED THE SAME INTER ALIA ON THE GROUND THAT THE LD. ASSESSING OFFICER HAS EA RNED IN DISALLOWING AMOUNT OF RS. 2,06,762/- U/S 14A OF THE INCOME TAX ACT READ WITH RULE 8D (2)(III). THE LD. CIT (A) AFTER HEARING THE ASSESSEE DISMISSED THIS GROUND OF APPEAL HOLDING THAT THE ISSUE OF DIS ALLOWANCE U/S 14A IS COVERED BY CIRCULAR OF CBDT NO. 5/2014 [F.NO. 22 5/182/2013- ITA.II] DATED 11/02/2014. 4. STILL AGGRIEVED, THE ASSESSEE IN APPEAL BEFORE T HE TRIBUNAL ON THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED ASSESSING OFFICER (DY. COMMISSIONER IN COME TAX, RANGE 9(2) (1), MUMBAI) HAS ERRED IN DISALLOWING AN AMOUN T OF RS. 2,06,762/- U/S. 14A OF THE INCOME TAX ACT READ WITH RULE 8D(2) (II) AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 16 HAS FURTHE R ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFICER. 2. THE LEARNED ASSESSING OFFICER HAS ERRED IN REALLOC ATING THE SUM EXPENDITURE OF NON EXEMPTED UNIT TO TAX EXEMPTED UN IT ON THE BASIS OF THE TURNOVER AND BY DOING SO RESTRICTED THE PROFIT OF E XEMPTED UNIT TO RS. 1,37,20,277/- INSTEAD OF RS. 1,60,06,372/- AS CLAIM ED BY THE APPELLANT 3 ITA NO. 1521/MUM/2015 ASSESSMENT YEAR: 2009-10 AND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )- 16 HAS FURTHER ERRED IN UPHOLDING THE ORDER OF THE ASSESSING OFFIC ER. 3. YOUR APPELLANT CRAVES TO LEAVES TO ADD, ALTER, AMEN D OR WITHDRAW ANY OF THE GROUND/S, IF NECESSARY. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE AT T HE OUTSET SUBMITTED THAT THE ASSESSEE DOES NOT WANT TO PRESS GROUND NO. 2 OF THE APPEAL. WE THEREFORE DISMISSED GROUND NO. 2 OF THE APPEAL AS NOT PRESSED . AS REGARDS FIRST GROUND OF THE APPEAL THE LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT THE LD. CIT (A) HAS WRONGLY CONFIRMED THE DISALLOWANCE OF RS. 2,06,762/ - U/S 14A OF THE ACT READ WITH RULE 8D (2) (III) RULES OF THE INCOME TAX. THE LD. COUNSEL FURTHER SUBMITTED THAT THE IMPUGNED ORDER IS CONTRARY TO TH E LAW LAID DOWN BY THE MUMBA BENCH OF ITAT IN GARWARE WALL ROPES LIMITED V S. ADDL. CIT (2014) 46 TAXMANN.COM 18 AS IN THE SAID CASE, THE TRIBUNAL HA S HELD THAT THE PROVISIONS OF SECTION ARE NOT APPLICABLE WHERE NO INCOME HAS B EEN CLAIMED AS EXEMPT. THE LD. COUNSEL FURTHER RELYING ON THE DECISION OF THE HONBLE HIGH COURT OF DELHI PASSED IN CHEMINVEST LTD. VS. COMMISSIONER OF INCOME TAX ITA NO. 749/2014 SUBMITTED THAT THE ORDER PASSED BY THE LD. CIT (A) IS LIABLE TO BE SET ASIDE. 6. ON THE OTHER HAND, THE LD. DR RELYING ON THE CO NCURRENT FINDINGS OF THE AUTHORITIES BELOW SUBMITTED THAT THE CASE IS RELIED UPON BY THE ASSESSEE ARE DISTINGUISHABLE ON FACTS. THEREFORE, THERE IS NO SC OPE FOR FURTHER INTERFERENCE IN THE ORDER PASSED BY THE LD. CIT (A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PLACED BEFORE US BY THE PARTIES, IN SUPPORT OF THEIR CONTE NTION, INCLUDING THE DECISIONS RELIED UPON BY THEM. IT IS NOT THE CASE OF THE REVE NUE THAT THE ASSESSEE HAS EARNED EXEMPT INCOME DURING THE PREVIOUS YEAR RELEV ANT TO THE ASSESSMENT YEAR. IT IS ALSO NOT DISPUTED THAT THE INVESTMENT W AS NOT MADE OUT OF ITS OWN FUNDS AND THAT NO INTEREST COST HAS BEEN INCURRED B Y THE ASSESSEE COMPANY FOR 4 ITA NO. 1521/MUM/2015 ASSESSMENT YEAR: 2009-10 MAKING OF SUCH INVESTMENT. THE LD. COUNSEL FURTHER SUBMITTED THAT IN THE PROCEEDINGS YEAR SUCH DISALLOWANCE U/S 14A WAS MADE BY THE THEN ASSESSING OFFICER IN ACCORDANCE WITH THE PROVISIONS OF RULE 8 D. HOWEVER, THE DISALLOWANCE WAS DELETED BY THE CIT (A) IN APPEAL. IN CHEMINVEST LTD. VS. CIT (SUPRA), THE HONBLE DELHI HIGH COURT HAS HELD THAT THE EXPRESSI ON DOES NOT FROM PART OF THE TOTAL INCOME IN SECTION 14A ENVISAGES THAT THE RE SHOULD BE ACTUAL RECEIPT OF INCOME, WHICH WAS NOT INCLUDABLE IN THE TOTAL INCOM E, DURING THE RELEVANT PREVIOUS YEAR FOR THE PURPOSE OF DISALLOWING ANY EX PENDITURE INCURRED IN RELATION TO THE SAID INCOME. SINCE, DURING THE ASSE SSMENT YEAR UNDER CONSIDERATION THE ASSESSEE DID NOT EARN ANY EXEMPT INCOME, THE LD. CIT(A) HAS WRONGLY CONFIRMED THE ADDITION. WE ARE, THEREFORE, OF THE CONSIDERED OPINION THAT THE CASE OF THE ASSESSEE COVERED BY THE DECISI ON OF THE HONBLE HIGH COURT (SUPRA) AND THE DECISIONS OF MUMBAI TRIBUNAL. WE TH EREFORE RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS DECIDE THIS GROUN D OF APPEAL IN FAVOUR OF THE ASSESSEE AND ALLOW THE SOLITARY GROUND OF APPEAL. 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2009-2010 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD FEB, 2017. SD/- SD/- (RAJENDRA) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER ) 1* MUMBAI; 2 DATED: 23/02/2017 ALINDRA, PS 5 ITA NO. 1521/MUM/2015 ASSESSMENT YEAR: 2009-10 !'#$%&'&$ / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $%!# / THE RESPONDENT. 3. ) 4( ( ) / THE CIT(A)- 4. ) 4( / CIT 5. 78 $(9& , , 9&0 , ) 1* / DR, ITAT, MUMBAI 6. : ; * / GUARD FILE. !' / BY ORDER, % 7( $( //TRUE COPY// ()*+ (DY./ASSTT. REGISTRAR) , ) 1* / ITAT, MUMBAI