Gujarat State Investments Ltd., Ahmedabad V. The Dy.CIT, Circle-4, Ahmedabad

ITA 279/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8713 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 07-08-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V K PATEL
• Assessee Lawyers: M G PATEL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

ITA NO S . 276, 277, 278, 279 & 241 8 /AHD/ 201 4 A .YS.: 20 04 - 05, 2006 - 07, 2009 - 10, 2010 - 11 & 2011 - 12 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR , AM AND MAHAVIR PRASAD , JM] ITA NO S . 276, 277, 278, 279 & 2418 / AHD / 2 0 1 4 ASSESSMENT YEAR S : 20 0 4 - 05, 2006 - 07, 2009 - 10, 2010 - 11 & 2011 - 12 GUJARAT STATE INVESTMENTS LIM ITED, ....... ...........APPELLANT 6 TH FLOOR, H.K. HOUSE, ASHRAM ROAD, AHMDABAD 380 014. [PAN : A ABC G 4649 M ] VS. INCOME TAX OFFICER, WARD 4(1), AHMEDABAD. ............................RESPONDENT APPEARANCES BY: M.G. PATE L FOR THE APPELLANT V.K. PATEL FOR THE RESPONDENT D ATE OF CONCLUDING THE HEARING : 10 .0 8 . 2017 DATE OF PRONOUNCING THE ORDER : 17 .08.2017 O R D E R PER PRAMOD KUMAR, AM: 1. THESE FIVE APPEALS PERTAIN TO THE SAME ASSESSEE, INVOLVE A COMMON ISSUE AND WERE HEARD TOGETHER. AS A MATTER OF CONVENIENCE, THEREFORE, ALL THE FIVE APPEALS ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER. 2. GRIEVANCES OF THE ASSESSEE IS THAT THE LEARNED CIT (A) HAS ERRED IN UPHOLDING THE DISALLOWANCE UND ER SECTION 14A BEING ENTIRE EXPENDITURE INCURRED BY THE APPELLANT INSTEAD OF RESTRICTING IT TO THE EXTENT OF NON - CORPORATE EXPENSES . ITA NO S . 276, 277, 278, 279 & 241 8 /AHD/ 201 4 A .YS.: 20 04 - 05, 2006 - 07, 2009 - 10, 2010 - 11 & 2011 - 12 PAGE 2 OF 3 3. THE SHORT CONTENTION OF THE ASSESSEE IS THAT TO THE EXTENT THE CORPO RATE EXPENSES INCURRED FOR MAINTENANCE AND EXIST ENCE OF CORPORATE ENTITY ARE CONCERNED, THE SAME CANNOT BE SUBJECTED TO DISALLOWANCE UNDER SECTION 14A BECAUSE IRRESPECTIVE OF WHETHER OR NOT THE ASSESSEE EARNS ANY TAX EXEMPT INCOME, THESE EXPENSES WILL HAVE TO BE INCURRED ANYWAY. THESE EXPENSES, THEREFO RE, CANNOT BE SAID TO HAVE BEEN INCURRED BY THE ASSESSEE IN RELATION OF A T AX EXEMPT INCOME . THIS PLEA HAS BEEN REJECTED BY THE AUTHORITIES BELOW. LEARNED COUNSEL THEN INVITES OUR ATTENTION TO THE O R DER DATED 20 TH JANUARY 2016, HOLDING THAT PROPORTION ATE DISALLOWANCE AS RELATABLE TO TAX EXEMPT INCOME IS IN ORDER. WE ARE URGED TO FOLLOW THE SAME. 4. LEARNED DEPARTMENTAL REPRESENTATIVE RELIES UPON THE STAND OF THE AUT HORITIES BELOW. 5. WE ARE UNABLE TO SEE ANY MERITS IN THE PLEA OF THE ASSESSEE. WHE N AN ASSESSEE COMPANY IS FORMED AS AN INVESTMENT COMPANY AND IT PRIMARILY EXISTS ONLY FOR EARRING TAX EXEMPT INCOME, IT CANNOT BE SAID THAT THE EXPENSES INCURRED FOR EXISTENCE OF CORPORATE ENTITY CANNOT BE SAID TO HAVE BEEN INCURRED IN RELATION TO EARNIN G OF AN INCOME WHICH IS EXEMPT FROM TAX. THAT EXACTLY IS THE SITUATION BEFORE US. UNDER THESE CIRCUMSTANCES, THEREFORE , THE RELIEF PRAYED OR CANNOT BE GRANTED. 6. THE JUDICIAL PRECEDENT CITED BEFORE US DOES NOT HELP THE ASS ES SEE ON THE ISSUE IN APPEAL B EFORE US . ITA NO S . 276, 277, 278, 279 & 241 8 /AHD/ 201 4 A .YS.: 20 04 - 05, 2006 - 07, 2009 - 10, 2010 - 11 & 2011 - 12 PAGE 3 OF 3 7. IN THE RESULT, APPEAL S ARE DISMISSED. PRONOUNCED IN THE OPEN COURT TODAY ON THE 17 TH DAY OF AUGUST, 2017. SD/ - S D / - MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUN TANT MEMBER) AHMEDABAD, THE 17 TH DAY OF AUGUST, 2017 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGIST RAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD