M/s. Kivar Holdings Private Limited, Bangalore V. Assistant Commissioner Of Income Tax, Circle- 4(1)(2), Bangalore

ITA 1553/BANG/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5206 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 27-08-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 27-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GANESH R GHALE TO D EPT
• Assessee Lawyers: S RAMASUBRAMANIAN
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, A BENCH : BANGALORE BEFORE SHRI B.R BASKARAN , ACCOUNTANT MEMBER ITA NO.1553/BANG/2019 ASSESSMENT YEAR : 2014-15 M/S KIVAR HOLDINGS PVT. LTD., NO.18C, 1 ST B MAIN, HSR LAYOUT, SECTOR-6, HOSUR-SARJAPUR ROAD, BENGALURU-560 034. PAN AACCS 7712 C VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-4(1)(2), BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI S RAMASUBRAMANIAN, C.A RESPONDENT BY : SHRI GANESH R GHALE, ADVOCATE STANDING COUNSEL TO D EPT. DATE OF HEARING : 05.11.2019 DATE OF PRONOUNCEMENT : 05.11.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING TH E ORDER DATED 10-05-2019 PASSED BY LD CIT(A)-12, BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2014-15. THE SOLITARY ISSUE URGED IN THIS APPEAL RELATE TO THE DISALLOWANCE MADE U/S 14A OF T HE ACT. 2. THE LD A.R SUBMITTED THAT THE ASSESSEE IS EN GAGED IN THE BUSINESS OF MAKING INVESTMENTS AND PROVIDING CONSUL TANCY SERVICES. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE DID NOT EARN ANY DIVIDEND INCOME. THE AO NOTICED THAT THE ASSESSEE HAS HELD INVESTMENTS AS AT THE OPENING AND CLOSING OF T HE YEAR. ITA NO.1553 /BANG/2019 PAGE 2 OF 4 ACCORDINGLY, THE AO WORKED OUT DISALLOWANCE U/S 14A OF THE ACT AT RS.40,49,451/- AS PER PROVISIONS OF RULE 8D OF IT R ULES. THE LD CIT(A) CONFIRMED THE SAME. 3. THE LD A.R PLACED HIS RELIANCE ON THE DECISI ON RENDERED BY HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD VS. DCIT (378 ITR 33) AND SUBMITTED THAT THE DISALLOWANCE U/ S 14A IS NOT WARRANTED WHEN THERE IS NO EXEMPT INCOME. HE FURTH ER SUBMITTED THAT THE ABOVE SAID DECISION WAS FOLLOWED BY THE CO -ORDINATE BENCH IN THE CASE OF M/S AMBUTHIRTHA POWER P LTD VS. DCIT (ITA NO.243 (BANG) 2016 DATED 07-07-2017). ACCORDINGLY HE SUBM ITTED THAT THE DISALLOWANCE MADE U/S 14A OF THE ACT SHOULD BE DELE TED. 4. ON THE CONTRARY, THE LD D.R SUPPORTED THE ORD ER PASSED BY LD CIT(A). 5. I HEARD THE PARTIES AND PERUSED THE RECORD. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE D ID NOT RECEIVE ANY EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION. HENCE, AS PER THE DECISION RENDERED BY HONBLE DELHI HIGH COURT I N THE CASE OF CHEMINVEST LTD (SUPRA), NO DISALLOWANCE U/S 14A OF THE ACT IS CALLED FOR. I ALSO NOTICE THAT THE DECISION RENDER ED BY HONBLE DELHI HIGH COURT HAS BEEN FOLLOWED BY THE BANGALORE BENCH OF TRIBUNAL IN THE CASE OF M/S AMBUTHIRTHA POWER P LTD (SUPRA). H ENCE, IN MY VIEW, THE LD CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE MADE BY AO U/S 14A OF THE ACT. ACCORDINGLY I SET A SIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIRECT THE AO TO DELETE THE ITA NO.1553 /BANG/2019 PAGE 3 OF 4 DISALLOWANCE MADE U/S 14A OF THE ACT DURING THE YEA R UNDER CONSIDERATION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 TH NOVEMBER, 2019. SD/- (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, THE 5 TH NOVEMBER, 2019. /VMS/ COPY TO: 1. APPELLANT (S) / CROSS OBJECTOR(S) 2. RESPONDENT(S) 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE ITA NO.1553 /BANG/2019 PAGE 4 OF 4 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DICTATION NOTE ENCLOSED DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. .. 14. DICTATION NOTE ENCLOSED