Maheshwari Megaventures Limited , Hyderabad V. Dy. Commissioner of Income Tax , Circle-16(2), Hyderabad

ITA 1743/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5395 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 16-03-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 27-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 143(3); 14A; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE S HRI SATBEER SINGH GODARA , JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU , ACCOUNTANT MEMBER ITA NO S . 1742 & 1743 /H/201 8 ASSESSMENT YEAR S : 20 13 - 14 & 2014 - 15 MAHESWARI MEGAVENTURES LTD., PAN A ADCM 9780D VS. ASST. COMMISSIONER OF INCOME - TAX , CIRCLE 1 6 ( 2 ), HYDERABAD. (APPELLANTS) (RESPONDENT) ASSESSEE BY: SHRI K.C. DEVDAS REVENUE BY: SHRI ROHIT MUJUMDAR DATE OF HEARING: 1 6 /0 3 /2021 DATE OF PRONOUNCEMENT: 07 /0 5 /2021 O R D E R PER L.P. SAHU , AM: BOTH T H E S E APPEAL S FILED BY THE ASSESSEE FOR AY S 20 13 - 14 & 2014 - 15 ARE DIRECTED AGAINST THE CIT(A) - 4 , HYDERABADS SEPARATE ORDER S , DATED 30 /0 5 /201 8 INVOLVING PROCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961 ; IN SHORT THE ACT . AS FACTS AND GROUNDS ARE IDENTICAL IN BOTH THESE APPEALS, THE SAME WERE CLUBBED AND HEARD TOGETHER AND THEREFORE A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. 2. THE RAISED IN BOTH THESE APPEALS REGARDING DISALLOWANCE U/S 14A OF THE ACT. I.T.A. NO S . 1742 & 1743 /HYD/201 8 M/S MAHESWARI MEGAVENTURES LTD., HYD. 2 3. THE FACTS AS TAKEN FROM AY 2013 - 14 ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF REAL ESTATE I.E., COMMERCIAL/MALLS/RESIDENTIAL DEVELOPMENTS AND HOSPITALITY BUSINESS OF LODGING AND BOARDING FIL ED ITS RETURN OF INCOME FOR THE A.Y. 2013 - 14 DECLARING TAXABLE INCOME OF RS., 1,05,55,890/ - WHICH WAS LATER REVISED ADMITTING THE TAXABLE INCOME AT RS. 1,13,86,340/ - . THE BOOK PROFITS WERE ADMITTED AT RS. 1,14,55,394/ - . THE CASE WAS SELECTED FOR SCRUTINY AND ACCORDINGLY, ASSESSING OFFICER ISSUED NOTICES. IN RESPONSE TO THE NOTICES, AR OF THE APPELLANT APPEARED AND FILED THE INFORMATION. AFTER GOING THROUGH THE INFORMATION, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY MAKING ADDITION OF RS. 2,00,000/ - T OWARDS DISALLOWANCE U/S 37(1), AND RS. 8,34,677/ - TOWARDS DISALLOWANCE U/S 14A AND ASSESSED THE TOTAL INCOME AT RS. 1,24,21,017/ - . 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AGAINST THE DISALLOWANCE MADE U/S 14A OF THE ACT. 5. T HE CIT(A) DIRECTED THE AO TO RESTRICT THE DISALLOWANCE U/S 14A TO THE TUNE OF DIVIDEND AMOUNT RECEIVED I.E. RS. 8,39,619/ - . I.T.A. NO S . 1742 & 1743 /HYD/201 8 M/S MAHESWARI MEGAVENTURES LTD., HYD. 3 6. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 7. WE HAVE CONSIDERED THE RIVAL SUBMIS SIONS AND PERUSED THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. IT IS A SETTLED POSITION THAT D ISALLOWANCE OF EXPENDITURE U/S. 14A READ WITH RULE 8D SHALL NOT EXCEED EXEMPT INCOME EARNED FOR THE YEAR AS PER CASE LAW CHEMINVEST LTD., REPORTED IN (2015) 378 ITR 33 (DEL.), CHETTINAD LOGISTICS PRIVATE LIMITED [2017] (4) TMI 298 - MADRAS AND CIT VS. CORRTECK ENGINEERING PVT. LTD . 372 ITR 97 (GU JRAT). THE ASSESSEE EARNED EXEMPT INCOME OF RS. 4,99,674 IN AY 2013 - 14 AND RS. 4,28,292 IN AY 2014 - 15 AS PER COMPUTATION OF INCOME . THEREFORE, WE DIRECT THE AO TO RESTRICT THE DISALLOWANCE U/S 14A RWR 8D TO RS. 4,99,674/ - IN AY 2013 - 14 AND RS. 4,28,292 IN AY 2014 - 15. 8. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED IN ABOVE TERMS. PRONOUNCED IN THE OPEN COURT ON 7 TH MAY , 2021. SD/ - ( S.S. GODARA ) JUDICIAL MEMBER SD/ - ( L.P. SAHU ) ACCOUNTANT MEMBER HYDERABAD, DATED 7 TH MAY , 2021 K V I.T.A. NO S . 1742 & 1743 /HYD/201 8 M/S MAHESWARI MEGAVENTURES LTD., HYD. 4 COPY TO 1 M/S MAHESWARI MEGAVENTURES LTD., C/O B. NARSING RAO & CO., CAS., PLOT NO. 554, ROAD NO. 92, JUBILEE HILLS, HYD. 96 2 AC IT, CIRCLE 16(2) , HYDERABAD. 3 CIT(A) - 4 , HYDERABAD. 4 PR. CIT 4 , HYDERABAD. 5 ITAT, DR, HYDERABAD. 6 GUARD FILE.