M/s. Prime Movers Auto Associates Pvt. Ltd., , Kolkata V. DCIT, Circle - 1(2), Kolkata , Kolkata

ITA 1796/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0274 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 21-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANKAR HALDER
• Keywords: Earning of tax free income; Rule 8D
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1796/KOL/2018 ( / ASSESSMENT YEAR: 2014-15) M/S PRIME MOVERS AUTO ASSOCIATES PVT. LTD. P-40, PRINCEP STREET, 1 ST FLOOR, KOLKATA-700072 VS. DCIT, CIRCLE-1(2), KOLKATA ./ ./PAN/GIR NO.: AABCP 4993 R (ASSESSEE) .. (REVENUE) ASSESSEE BY : NONE RESPONDENT BY : SHRI SHANKAR HALDER, JCIT, SR. DR / DATE OF HEARING : 16/04/2019 /DATE OF PRONOUNCEMENT : 28/06/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERT AINING TO ASSESSMENT YEAR 2014-15, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-1, KOLKATA, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) DATED 19/12/2016. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF OF ASSESSEE IN SPITE OF ISSUANCE OF NOTICE FOR HEARING MORE THAN ONE OCCASION AND LD . DEPARTMENTAL REPRESENTATIVE(DR), WAS PRESENT FOR THE APPELLANT R EVENUE. IN THE ABSENCE OF ANY APPEARANCE BY THE ASSESSEE, THE APPEAL IS BEING DIS POSED OF EX PARTE QUA THE M/S PRIME MOVERS AUTO ASSOCIATES PVT. LTD. ITA NO.1796/KOL/2018 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 2 22 2 ASSESSEE, AFTER HEARING LD. DR FOR THE REVENUE ON M ERITS IN TERMS OF RULE 24 OF THE INCOME TAX APPELLATE, TRIBUNAL, RULES, 1963. 3. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) ERRED IN PASSING ORDER EX PARTE. 2. THAT UNDER THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF RS. 288,653/- IN TERMS OF SECTION 14A. THE DISALLOWANCE IS UNJUSTIFIED & NEEDS TO BE DELE TED. 3. THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER, MO DIFY OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL AT THE TIME OF HEARING. 4. BRIEF FACTS QUA THE ISSUE ARE THAT DURING THE AS SESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE THE DISALLOWANCE U/S 14A REA D WITH RULE 8D AND MADE A DETAILED COMPUTATION UNDER RULE 8D VIDE PAGE NOS. 2 AND 3 OF THE ASSESSMENT ORDER, WHEREIN THE ASSESSING OFFICER MADE THE DISAL LOWANCE U/S 14A READ WITH RULE 8D(2)(II) AND 8D(2)(III) TO THE TUNE OF RS. 28 8,653/- (RS. 2,39,153/- + RS. 49,500/-). 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONFIRMED T HE ORDER MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF LD. CI T(A) THE ASSESSEE IS IN APPEAL BEFORE US. 6. AFTER HEARING THE LD. DR FOR THE REVENUE AND PER USING THE JUDICIAL DECISION ON THE ISSUE, WE FIND THAT THE ISSUE INVOLVED IN THE P RESENT APPEAL IS NOT LONGER RES INTEGRA. WE NOTE THAT IN THIS CASE THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME. SINCE THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME THEREFORE THERE SHOULD NOT BE ANY DISALLOWANCE U/S 14A READ WITH RULE 8D OF IT RU LES. FOR THAT WE RELY ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS. HOLCIN INDIA PVT. M/S PRIME MOVERS AUTO ASSOCIATES PVT. LTD. ITA NO.1796/KOL/2018 ASSESSMENT YEAR:2014-15 P PP PA AA AG GG GE EE E | || | 3 33 3 LTD. IN I.T.A. NO. 406/2014 WHEREIN IT WAS HELD THA T IN THE ABSENCE OF ANY TAX FREE INCOME, THE CORRESPONDING EXPENDITURE COULD NOT BE WORKED OUT FOR MAKING DISALLOWANCE UNDER SECTION 14A OF THE ACT. HONBLE DELHI HIGH COURT IN THE CASE OF CHEM INVEST VS. CIT IN I.T.A. NO. 749/2014 ORDER DATED 02.09.2015 HELD THAT SECTION 14A WILL NOT APPLY IF NO EXEMPT INCOME IS R ECEIVED DURING THE RELEVANT PREVIOUS YEAR. HENCE RELYING ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT WHEREIN IT WAS HELD THAT IF THERE IS NO EXEMPT INCOME NO DISALLOWA NCE SHOULD BE MADE U/S 14A READ WITH RULE 8D(2)(II) OF THE ACT. WE NOTE THAT THE ASSESSEES CASE UNDER CONSIDERATION AFTER PERUSING THE ASSESSMENT ORDER WE FIND THAT THERE IS NO EXEMPT INCOME THEREFORE NO DISALLOWANCE IS ATTRACTED. HENC E THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 28.06.2019 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 28/06/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. M/S PRIME MOVERS AUTO ASSOCIATES PVT. LTD. 2. DCIT, CIRCLE-1(2), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES