M/s Hindustan Thermalprojects Ltd., New Delhi V. DCIT, New Delhi

ITA 2289/DEL/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7852 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 17-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N MEENA
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI C BEN CH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI KULDIP SINGH, JUDICIAL MEM BER ITA NO. 2289/DEL/2017 [A.Y 2012-13] M/S HINDUSTANT THERMAL PROJECTS LTD VS. THE D.C.I. T [FORMERLY KNOWN AS MOSER BAER POWER CIRCLE 17(1 ) & INFRASTRUCTURE LTD NEW DELHI 616A [16A], 6 TH FLOOR, DEVIKA TOWER NEHRU PLACE, NEW DELHI PAN: AAAFCM 6703 L (APPLICANT) (RESPONDENT) ASSESSEE BY : SHRI DINESH VE RMA, ADV DEPARTMENT BY : SHRI S.N. MEENA, SR. DR DATE OF HEARING : 27.01.2020 DATE OF PRONOUNCEMENT : 27.01.2020 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] -33, NEW DELHI DATED 12.01.2017 PERTAINING TO ASSESSMENT YEAR 2012-13. 2 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING O FFICER U/S 14A OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO A S 'THE ACT' FOR SHORT] READ WITH RULE 8D OF THE INCOME TAX RULES, 1962. 3. FACTS EMANATING FROM THE ASSESSMENT ORDER SHOW T HAT DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSE SSING OFFICER NOTICED THAT THE ASSESSEE HAS MADE INVESTMENT IN SH ARES AMOUNTING TO RS. 6.47 CRORES. THE ASSESSING OFFICER WAS OF THE FIRM BELIEF THAT PROVISIONS OF SECTION 14A R.W.R 8D SQUARELY APPLY A ND INVOKING THE PROVISIONS OF SECTION 14A R.W.R 8D, THE ASSESSING O FFICER COMPUTED THE DISALLOWANCE AT RS. 1,76,40,848/-. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE STA TED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS NOT RECE IVED ANY EXEMPT INCOME AND, THEREFORE, NO DISALLOWANCE IS TO BE MAD E U/S 14A OF THE ACT. 3 6. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE OR DERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT DURING THE YEAR THE ASSESSEE DID NOT EARN ANY EXEMPT INCOME FROM TAX. SINCE THERE IS NO EXEMPT INCOME EARNED BY THE ASSESSEE DURING THE YEA R, THERE CANNOT BE ANY DISALLOWANCE U/S 14A R.W.R 8D. THIS ISSUE I S BY NOW WELL SETTLED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE B Y THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF M/ S CHEMINVEST LTD 121 ITD 318 WHICH WAS AFFIRMED BY THE HON'BLE HIGH COURT OF DELHI. SAME VIEW IS TAKEN BY THE HON'BLE GUJARAT HIGH COUR T IN THE CASE OF CORRTECH ENERGY (P) LTD 372 ITR 97. IN VIEW OF THE ABOVE, THE IMPUGNED DISALLOWANCE IS DIRECTED TO BE DELETED. A CCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO. 2289/DEL/2017 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 27. 01.2020. SD/- SD/- [ KULDIP SINGH] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 JANUARY, 2020. VL/ 4 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI