ACIT Circle-17(1), New Delhi V. Morgan Securities & Credit (P) Ltd., New Delhi

ITA 1857/DEL/2019

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9439 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 04-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. KUL BHARAT, JUDICIAL MEMBER ITA No.1857/Del/2019 Assessment Year: 2009-10 ACIT Circle – 17 (1) New Delhi Vs Morgan Securities & Credit (P) Ltd. 37, Ring Road, Lajpat Nagar-VI, New Delhi PAN No.AACCM7937R (APPELLANT) (RESPONDENT) Appellant Sh. Jeetender Chand, Sr. DR Respondent Sh. VIkas Singh, CA Date of hearing: 07.09.2022 Date of Pronouncement: 07.09.2022 ORDER PER N.K. BILLAIYA, AM: This appeal by the revenue is preferred against the order of the CIT(A)-6, Delhi dated 11.12.2018 for A.Y.2009-10. 2. The solitary grievance of the revenue is that the CIT(A) erred in restricting the disallowance made by the AO u/s. 14A r.w.r. 8D to the amount of exempt income. 3. Briefly stated the facts of the case are that during the course 2 of the scrutiny assessment proceedings which were initiated as per directions of this Tribunal in ITA No.5942/Del/2013 and Co. 198/Del/2015 the AO noticed that the assessee has made substantial investment in shares of companies. The AO further found that the assessee has shown total expenses of Rs.87325771/-. The AO was of the firm belief that the assessee has diverted its interest bearing funds towards investment of which exempt income is earned. Invoking the provisions of section 14A r.w.r. 8D the AO computed the disallowance at Rs.21027042/-. 4. The assessee challenged the disallowance before the CIT(A) and vehemently contended that the assessee has claimed exempt income of an amount of Rs.140640/-, therefore, disallowance if any, should not exceed the exempt income earned. 5. After considering the facts and the submissions and drawing support from the decision of the Hon’ble Supreme Court in the case of Maxoop Investment Limited 91 taxmann.com 154. The CIT(A) directed the AO to limit the disallowance u/s. 14A r.w.r. 8D to the amount of exempt income earned i.e. Rs.140640/-. 6. Before us the DR strongly supported the assessment order and read relevant findings of the AO. 3 7. Per contra the Counsel for the assessee reiterated what has been stated before the first appellate authority. 8. We have carefully perused the orders of the authorities below. There is no dispute that the total income claimed to be exempt was Rs.140640/-, therefore, the ratio laid down by the Hon’ble High Court of Delhi in the case of Caraj Builders and Construction 414 ITR 122 squarely apply wherein the Hon’ble High Court has held that disallowance u/s.14A of the Act cannot exceed the exempt income of the year. A special leave petition filed by the revenue was dismissed by the Hon’ble Supreme Court in the case of Pr. CIT Vs. Caraf Builders & Constructions (P) Ltd. 112 taxman.com 322. Respectfully following the decision of the Hon’ble Jurisdictional High Court (supra) we decline to interfere with the findings of the CIT(A). The appeal filed by the revenue is dismissed. 9. Decision announced in the open court on 12.09.2022. Sd/- Sd/- (KUL BHARAT) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER *NEHA, Sr. Private Secretary* Date:- .09.2022 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR 4 ITAT NEW DELHI Date of dictation 07.09.2022 Date on which the typed draft is placed before the dictating Member 12.09.2022 Date on which the typed draft is placed before the Other member 12.09.2022 Date on which the approved draft comes to the Sr.PS/PS 19.09.2022 Date on which the fair order is placed before the Dictating Member for Pronouncement 19.09.2022 Date on which the fair order comes back to the Sr. PS/ PS 19.09.2022 Date on which the final order is uploaded on the website of ITAT 19.09.2022 Date on which the file goes to the Bench Clerk 19.09.2022 Date on which file goes to the Head Clerk. The date on which file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order