M/s Tanglin Retail Reality Developments Private Limited, Bangalore V. DCIT, Bangalore

ITA 265/BANG/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8444 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-02-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 26-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K BIJU
• Assessee Lawyers: C RAMESH
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO.265/BANG/2016 ASSESSMENT YEAR : 2012-13 M/S. TANGLIN RETAIL REALITY DEVELOPMENTS PRIVATE LIMITED, NO.23/2, 9 TH FLOOR, COFFEEDAY SQUARE, VITTAL MALLYA ROAD, BENGALURU-560001. PAN : AADCT0023G VS. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5(1)(1), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. C. RAMESH, CA REVENUE BY : SHRI. M. K. BIJU, JCIT DATE OF HEARING : 21.02.2017 DATE OF PRONOUNCEMENT : 31.03.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST T HE ORDER OF CIT(A) ON THE FOLLOWING GROUNDS: ITA NO.265/BANG/2016 PAGE 2 OF 4 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS OPPOSED TO THE FACTS OF THE CASE AND LAW APPLICABLE TO IT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING DISALLOWANCE TO THE EXTENT OF RS.68,40,793/- UNDER THE PROVISIONS OF SECTION 14A OF THE ACT R.W. RULE 8D(2 )(III) OF THE RULES IGNORING THE FACT THAT, FOR THE FACTS OF THE APPELL ANT CASE THE PROVISIONS OF SECTION 14A OF THE ACT, DOES NOT APPLY. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE DISALLOWANCE U/S.14A OF THE ACT, IGN ORING THE FACT THAT, THE APPELLANT HAD NOT RECEIVED ANY EXEMPT INC OME AND THEREFORE NO EXPENDITURE COULD HAVE BEEN DISALLOWED UNDER THE SAID PROVISIONS. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT FOLLOWING THE RATIO IN REGARD TO THE POSITION OF LAW LAID DOW N BY THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF M/S.CCI LIMITED V S. JCIT, UDUPI RANGE IN ITA NO.359/2011, WHEREIN IT IS HELD THAT, IN THE ABSENCE OF EXEMPT INCOME NO DISALLOWANCE CAN BE MADE U/S.14A OF THE A CT. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT, THE DISALLOWANCE U/S.14 A OF THE ACT, HAS BEEN MADE BY THE ASSESSING OFFICER WITHOUT ANY MATE RIAL TO PROVE THAT, THE APPELLANT HAS INFACT INCURRED ANY EXPENDI TURE IN CONNECTION WITH THE INVESTMENTS ALLEGEDLY FOR THE PURPOSE OF E ARNING EXEMPT INCOME. 6. THE APPELLANT CRAVES PERMISSION TO ADD, DELETE O R ALTER ANY OF THE GROUNDS AT THE TIME OF HEARING. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSE L FOR THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE HAS NOT RECEIVED AN Y EXEMPTED INCOME THEREFORE NO DISALLOWANCE UNDER SECTION 14A CAN BE MADE. IN SUPPORT OF ITA NO.265/BANG/2016 PAGE 3 OF 4 HIS CONTENTION, HE HAS INVITED OUR ATTENTION TO COM PUTATION OF INCOME ALONG WITH BALANCE SHEET. HE HAS ALSO PLACED RELIANCE UP ON THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. CCI LIMITED VS. JCIT, UDUPI RANGE IN ITA NO.359/2011 , WHEREIN IT HAS BEEN HELD THAT IN THE ABSENCE OF ANY EXEMPTED INCOME UNDER THE PROVISIONS OF THE ACT , NO DISALLOWANCE CAN BE MADE UNDER THE PROVISIONS OF SECTION 14A OF THE ACT. BESIDES, HE ALSO PLACED RELIANCE UPON SERIES OF JUDGMENTS MENTIONED IN THE WRITTEN SUBMISSIONS. COPY OF THE ORDER OF THE TRIBUNAL IN WHICH IDENTICAL VIEW HAS BEEN TAKEN IN THE CASE OF M/S.FAIR EXPORTS (INDIA) P. LTD., VS. ACIT IN ITA NO.1880/2012 OF MUMBAI BENCH IS PLACED ON RECORD. 3. THE LEARNED DR SIMPLY PLACED RELIANCE UPON THE O RDER OF THE CIT(A). 4. HAVING CAREFULLY EXAMINED THE ORDER OF THE LOWER AUTHORITIES IN THE LIGHT OF THE RIVAL SUBMISSIONS, WE FIND THAT THE AS SESSEE HAS NOT RECEIVED ANY EXEMPTED INCOME, THEREFORE NO DISALLOWANCE UNDE R SECTION 14A IS TO BE MADE. WE HAVE ALSO CAREFULLY EXAMINED THE COMPU TATION OF INCOME AND THE BALANCE SHEETS AND FIND THAT THE ASSESSEE HAS N OT EARNED ANY EXEMPTED INCOME. WE HAVE ALSO EXAMINED THE JUDGMEN TS REFERRED TO BY THE ASSESSEE IN WHICH A SIMILAR PROPOSITION HAS BEE N LAID DOWN. THEREFORE, WE ARE OF THE VIEW THAT WHEN THE ASSESSEE HAS NOT R ECEIVED ANY EXEMPTED INCOME, NO DISALLOWANCE UNDER SECTION 14A CAN BE MA DE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE AD DITIONS MADE AFTER MAKING DISALLOWANCE UNDER SECTION 14A OF THE ACT. ITA NO.265/BANG/2016 PAGE 4 OF 4 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 31 ST DAY OF MARCH, 2017. SD/- SD/- (INTURI RAMA RAO) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE. DATED: 31 ST MARCH, 2017. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.