Suma Shilp Ltd, Pune V. Deputy Commissioner of Income-tax, Circle - 6, Pune

ITA 1681/PUN/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9847 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 05-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARISES OUT OF PASSED
• Keywords: Earning of tax free income; Revised return; Rule 8D
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO.1681/PUN/2017 / ASSESSMENT YEAR : 2012-13 SUMA SHILP LTD., 93/5A, ERANDAWANE, PUNE 411004 PAN : AACCS4724N VS. DCIT, CIRCLE 6, PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASS ED BY THE CIT(A)-4, PUNE ON 01-03-2017 IN RELATION TO THE ASSESSM ENT YEAR 2012-13. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE CONFIRMATION OF DISALLOWANCE OF RS.8,94,157/- MADE BY THE ASSESSING OFFICER (AO) UNDER SECTION 14A OF THE INCOME- TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT) READ WITH RULE 8D O F THE INCOME-TAX RULES, 1962. ASSESSEE BY SHRI NIKHIL PATHAK REVENUE BY SHRI MARUTI W MADDEWAD DATE OF HEARING 02-07-2020 DATE OF PRONOUNCEMENT 03-07-2020 ITA NO.1681/PUN/2017 SUMA SHILP LTD 2 3. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LEASING, WIND POWER GENERATION, TRADING IN SHARES, PROMOTERS & BUILDERS. IT FILED REVISED RETURN D ECLARING GROSS INCOME AT RS.5.50 CRORE. IT ALSO EARNED DIVIDEND IN COME OF RS.1,83,420/-, WHICH WAS CLAIMED AS EXEMPT. THE ASSE SSEE OFFERED SUO MOTO DISALLOWANCE U/S.14A FOR A SUM OF RS.3,00,000/-. INVOKING THE PROVISIONS OF SECTION 14A R.W. RULE 8D OF TH E INCOME- TAX RULE, 1962, THE AO COMPUTED THE TOTAL DISALLOWANCE AT RS.11,94,157/-. AFTER ALLOWING THE BENEFIT OF AMOUNT ALREAD Y OFFERED BY THE ASSESSEE, HE MADE FURTHER DISALLOWANCE OF RS.8,94,157/-, WHICH CAME TO BE AFFIRMED IN THE FIRST APPE AL. THE ASSESSEE IS AGGRIEVED BY THE SUSTENANCE OF SUCH DISALLOWAN CE. 4. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. 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 O F MAKING ANY DISALLOWANCE U/S 14A OF THE ACT. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE DELHI HIGH COURT IN CIT VS. HOLCIM INDIA P. LTD. (2014) 90CCH 081-DEL-HC . TAKING THIS PROPOSITION FURTHER, THE HONBLE JURISDICTIONAL HIGH COURT IN PR. CIT VS. HSBC INVEST DIRECT (INDIA) LTD. (2020) 421 ITR 125 (BOM) HAS HELD THAT ITA NO.1681/PUN/2017 SUMA SHILP LTD 3 DISALLOWANCE U/S 14A CANNOT EXCEED THE AMOUNT OF EXEMPT INCO ME. ADVERTING TO THE FACTS OF THE INSTANT CASE, IT IS SEEN THAT THE AMOUNT OF SUO MOTU DISALLOWANCE OFFERED BY THE ASSESSEE (RS.3.00 LAC) IS GREATER THAN THE AMOUNT OF EXEMPT INCOME (RS. 1.83 LAC). THAT BEING THE POSITION, THERE CAN BE NO QUESTION OF ANY FURTHER DISALLOWANCE U/S 14A OF THE ACT. WE, THEREFORE, OVERTURN TH E IMPUGNED ORDER ON THIS COUNT AND DELETE THE FURTHER DISALLOWA NCE SUSTAINED IN THE FIRST APPEAL. 5. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD JULY, 2020. SD/- SD /- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER V ICE PRESIDENT PUNE; DATED : 03 RD JULY, 2020 GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-4, PUNE 4. 5. 6. THE PR.CIT-3, PUNE , , / DR A, ITAT, PUNE; / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NO.1681/PUN/2017 SUMA SHILP LTD 4 DATE 1. DRAFT DICTATED ON 02-07-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 02-07-2020 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. *