Andhra Cardiology Associates Private Limited, Hyderabad V. Income Tax Officer, Ward-1(3), Hyderabad

ITA 2008/Hyd/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7228 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2012-2013
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: S RAMA RAO
• Keywords: Earning of tax free income; Rule 8D; Set aside
• Section: 14A

Judgement Text

ITA NO 2008 OF 2017 ANDHRA CARDIOLOGY ASSOCIATES P LTD HYDERABAD.. PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ITA NO.2008/HYD/2017 ASSESSMENT YEAR: 2012-13 ANDHRA CARDIOLOGY ASSOCIATES (P) LTD, HYDERABAD PAN: AABCA7642J VS. INCOME TAX OFFICER, WARD 1(3) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI S. RAMA RAO REVENUE BY : SMT. N. SWAPNA, DR DATE OF HEARING: 02/09/2020 DATE OF PRONOUNCEMENT: 04/09/2020 ORDER PER D.S. SUNDER SINGH, A.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2012-13 AGAIN ST THE ORDER OF THE CIT (A)-8, HYDERABAD, DATED 25.09. 2017. 2. ALL THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THIS APPEAL ARE RELATING TO DISALLOWANCE MADE U/S 14A R. W.RULE 8D(2) OF THE I.T. RULES. THE AO MADE THE ADDITION OF RS.2 3,56,350/- RELATING TO EXEMPT INCOME U/S 14A OF THE I.T. ACT I NVOKING RULE 8D(2) OF I.T. RULES. ON APPEAL BEFORE THE CIT (A), THE LD.CIT (A) DISMISSED THE APPEAL OF THE ASSESSEE. HENCE, THE AS SESSEE IS IN APPEAL BEFORE US. 3. DURING THE APPEAL HEARING, THE LEARNED AR SUBMIT TED THAT THE AO MADE THE DISALLOWANCE U/S 14A R.W.RULE 8D(2) OF THE ITA NO 2008 OF 2017 ANDHRA CARDIOLOGY ASSOCIATES P LTD HYDERABAD.. PAGE 2 OF 3 I.T RULES, BUT THE ASSESSEE DID NOT EARN ANY EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION. REFERRING TO P AGE NO.38 OF THE PAPER BOOK, THE ASSESSEE SUBMITTED THAT OTHER I NCOME REPORTED IN THE PROFIT &LOSS ACCOUNT WAS INTEREST I NCOME WHICH WAS OFFERED TO TAX AND THERE WAS NO EXEMPT INCOME C LAIMED BY THE ASSESSEE. REFERRING TO PAGE NO.1A OF THE PAPER BOOK , THE ASSESSEE HAS SHOWN THE COMPUTATION OF STATEMENT OF INCOME AN D SUBMITTED THAT THERE WAS NO EXEMPT INCOME CLAIMED BY THE ASSE SSEE. THE LD.A.R FURTHER ARGUED THAT IN THE ABSENCE OF EXEMPT INCOME, THERE IS NO CASE FOR MAKING THE DISALLOWANCE U/S 14A, AS DECIDED IN THE CASE OF PR. CIT VS. GVK PROJECTS & TECHNICAL SERVIC ES LTD (106 TAXMANN.COM 180(DELHI). THE LD.A.R FURTHER SUBMITTE D THAT THE HON'BLE SUPREME COURT ALSO DISMISSED THE SLP FILED BY THE REVENUE HOLDING THAT THERE IS NO CASE FOR MAKING TH E DISALLOWANCE U/S 14A IN THE ABSENCE OF EXEMPT INCOME. THE LEARNE D AR FURTHER ARGUED THAT SIMILAR VIEW WAS EXPRESSED BY THE HON'B LE SUPREME COURT IN THE CASE OF PR. CIT VS. MOONSTAR SECURITIE S TRADING & FINANCE CO (P) LTD REPORTED IN 105 TAXMANN.COM 275 (SC) AND DISMISSED THE SLP. THE LD A.R. ALSO TAKEN SUPPORT F ROM THE DECISION OF THIS TRIBUNAL IN THE CASE OF M/S C&K MA NAGEMENT LTD IN ITA NO.457/HYD/2019 DATED 08/01/2020 BY SMC BENC H. 4. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. THE HON'BLE DELHI HIGH C OURT IN THE CASE OF CIT VS. GVK PROJECTS & TECHNICAL SERVICES L TD (SUPRA) UPHELD THE ORDER OF THE ITAT WHEREIN DISALLOWANCE M ADE U/S 14A WAS DELETED IN THE ABSENCE OF EXEMPT INCOME AND THE HON'BLE APEX COURT DISMISSED THE SLP FILED BY THE REVENUE A GAINST THE ITA NO 2008 OF 2017 ANDHRA CARDIOLOGY ASSOCIATES P LTD HYDERABAD.. PAGE 3 OF 3 ORDER OF THE HON'BLE DELHI HIGH COURT. SIMILAR VIE W WAS TAKEN BY THE ITAT HYDERABAD IN SMC CASE CITED (SUPRA). THERE IS NO DISPUTE THAT THERE IS NO EXEMPT INCOME CLAIMED BY T HE ASSESSEE TO DISALLOW THE EXPENDITURE RELATABLE TO EXEMPT INCOME . THE LD.AR ESTABLISHED FROM THE INFORMATION THAT THERE WAS NO EXEMPT INCOME EARNED BY THE ASSESSEE. THE LD.D.R DID NOT B RING ANY CASE LAW TO CONTROVERT THE DECISION RELIED UPON BY THE A SSESSEE. THEREFORE, RESPECTFULLY FOLLOWING THE DECISIONS OF HON'BLE HIGH COURT OF DELHI (SUPRA), WE HOLD THAT NO DISALLOWANC E IS CALLED FOR U/S 14A OF THE ACT IN THE ABSENCE OF EXEMPT INCOME. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LEARNED CIT (A) AND D ELETE THE ADDITION MADE BY THE AO. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH SEPTEMBER, 2020. SD/- SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER (D.S.SUNDER SINGH) ACCOUNTANT MEMBER HYDERABAD, DATED 4 TH SEPTEMBER, 2020. VINODAN/SPS COPY TO: 1 ANDHRA CARDIOLOGY ASSOCIATES (P) LTD., 6-3-248/1/ 1A, ROAD NO.1, BANJARA HILLS, HYDERABAD 500034 2 ITO WARD 1(3) IT TOWERS, AC GUARDS, HYDERABAD 3 CIT (A)-8, HYDERABAD 4 PR. CIT 1 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER