M/s. Power Build Ltd., Anand V. The DCIT, Anand Circle, Anand

ITA 22/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4922 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 20-02-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 01-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SINGH SHARMA
• Keywords: Earning of tax free income; Rule 8D
• Section: 143(3); 14A; 250

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD , JUDICIAL MEMBER ./ I.T.A. NO. 22/AHD/2018 ( ASSESSMENT YEAR : 2013-14) M/S. POWER BUILD LTD. POST BOX NO. 28, VITHAL UDYOGNAGAR, ANAND 388121 / VS. DCIT ANAND CIRCLE, ANAND ./ ./ PAN/GIR NO. : AABCP2464K ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI SUNIL TALATI, A.R / RESPONDENT BY : SHRI VIKRAM SINGH SHARMA, SR.D.R. DATE OF HEARING 20/02/2020 !'# / DATE OF PRONOUNCEMENT 21/02/2020 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-4, VADODARA (CIT(A) IN SHORT), DATED 15 .09.2017 ARISING IN THE ASSESSMENT ORDER DATED 03.03.2016 PA SSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) OF THE INCOM E TAX ACT, 1961 (THE ACT) CONCERNING AY 2013-14. ITA NO. 22/AHD/18 [M/S. POWER BUILD LTD. VS. DCIT] A.Y. 2013-14 - 2 - 2. THE SOLITARY ISSUE INVOLVED IS DISALLOWANCE OF RS.2,50,000/- ON AD HOC AND ESTIMATED BASIS BY INVO KING PROVISIONS OF SECTION 14A OF THE ACT. 3. WE HAVE HEARD RIVAL SUBMISSIONS ON THE ISSUE. AS POINTED OUT ON BEHALF OF THE ASSESSEE, THE ASSESSEE HAS CLA IMED EXEMPT INCOME TO THE EXTENT OF RS.2,15,386/-. AS AGAINST THE AFORESAID EXEMPT INCOME, ASSESSEE ITSELF HAS DISALLOWED RS.3, 18,441/- UNDER S.14A OF THE ACT. THEREFORE, NO ADDITIONAL D ISALLOWANCE IS PERMISSIBLE IN VIEW OF THE DECISION OF THE HONB LE GUJARAT HIGH COURT IN THE CASE OF CIT VS. CORRTECH ENERGY P. LTD. 372 ITR 97 (GUJ.) . IN ANOTHER JUDGMENT IN THE CASE OF CIT VS. VISION FINSTOCK LTD. TAX APPEAL NO. 486 OF 2017 DAT ED 31.07.2017 THE HONBLE GUJARAT HIGH COURT HAS ONCE AGAIN EXPRESSED THE SIMILAR VIEW AND HELD THAT DISALLOWAN CE OF EXPENDITURE IN TERMS OF SECTION 14A R.W. RULE 8D CA NNOT EXCEED THE EXEMPT INCOME ITSELF. IT IS NOTICED THAT SLP(CIVIL) [DIARY NO. 13152/2018 ] FILED BY THE REVENUE AGAINST THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN VISION FINSTOCK LTD. (SUPRA) HAS BEEN DISMISSED ON MERITS BY THE HONBLE SUPREME COURT VIDE ORDER DATED 07.05.2018. THE REFERENCE IS ALSO MADE TO THE DECISION OF HONBLE SUPREME COURT OF INDIA IN CIT VS. CHETTINAD LOGISTICS (P.) LTD. (2018) 95 TAXMANN.COM 250 (SC). THUS, IN THE LIGHT OF JUDICIAL PRECEDENTS NOTED ABO VE, NO ADDITIONAL DISALLOWANCE IS CALLED FOR UNDER S.14A O F THE ACT IN EXCESS OF EXEMPT INCOME. GROUND NO.1 OF THE ASSESS EES APPEAL IS ACCORDINGLY ALLOWED. ITA NO. 22/AHD/18 [M/S. POWER BUILD LTD. VS. DCIT] A.Y. 2013-14 - 3 - 4. AS THE ASSESSEE HAS ALREADY DISALLOWED EXPENSES IN EXCESS OF THE EXEMPT INCOME, WE DO NOT SEE ANY MERIT IN TH E ACTION OF THE CIT(A) FOR CONFIRMING A FURTHER SUM BY WAY OF A D HOC DISALLOWANCE IN CONTROVERSY. THE APPEAL OF THE ASS ESSEE IS ACCORDINGLY ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 21/02/2020 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 21/02/202 0