Deputy Commissioner of Income Tax Circle-1(1)(1), Bangalore V. M/s Axiscades Aerospace & Technologies Pvt Ltd , Bangalore

ITA 314/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4773 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 02-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE S HRI N.V. VASUDEVAN , JUDICIAL MEMBER AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER I.T . A. NO. 314 /BANG/20 18 (ASSESSMENT YEAR : 20 13 - 14 ) DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(1)(1), BANGALORE. . APPELLANT. VS. M/S. AXISCADES AEROSPACE & TECHNOLOGIES PVT. LTD., NO.54, JUPITER INNOVISION CENTRE, RICHMOND ROAD, BANGALORE - 560 025 . .. RESPONDENT. APPELLANT BY : SMT. PADMA MEENAKSHI, JCIT (D.R) R E SPONDENT BY : SMT. SHEETAL BORKAR, ADVOCATE. DATE OF H EARING : 24.05.2018. DATE OF P RONOUNCEMENT : 31 .05 .201 8 . O R D E R PER SHRI INTURI RAMA RAO , A .M . : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - 1. BANGALORE DT.29 .07.2017 FOR THE ASSESSMENT YEAR 2013 - 14. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL : 2 IT A NO. 314 /BANG/201 8 3. BRIEFLY THE FACTS OF THE CASE ARE THAT THE RESPONDENT - ASSESSEE IS A COMPANY DULY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956. IT IS E NGAGED IN THE BUSINESS OF SYSTEM INTEGRATION ACTIVITIES FOR DEFENCE AND OFFSET BUSINESS. IT FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2013 - 14 ON 5.9.2014 DECLARING AN INCOME OF RS.3,77,06,881. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS C OMPLETED BY THE ASSESSING OFFICER VIDE ORDER DT.24.03.2016 PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') DETERMINED THE TOTAL INCOME AT RS.6,59,87,925. WHILE DOING SO, THE ASSESSING OFFICER MADE AN 3 IT A NO. 314 /BANG/201 8 ADDITION OF RS.2,82,81,044 INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT. THE CONTENTION OF THE ASSESSEE IS THAT THE INVESTMENTS WERE MADE, BUT NO EXEMPT INCOME OR DIVIDEND INCOME WAS RECEIVED, THEREFORE THE PROVISIONS OF SECTION 14A OF THE ACT CANNOT BE INVOKED, THE ASSESSIN G OFFICER DENIED THE CLAIM OF THE ASSESSEE PLACING RELIANCE ON CBDT CIRCULAR NO.5 OF 2014 DT.11.12.2014. BEING AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT (APPEALS). THE LEARNED CIT (APPEALS) DELETED THE ADDITION MADE UNDER SECTION 14A OF THE ACT ON THE GROUND THAT THE ASSESSEE HAD NOT RECEIVED ANY EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION. BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. NOW IT I S SETTLED PROPOSITION OF LAW THAT THE PROVISIONS OF SECTION 14A CANNOT BE INVOKED IN THE ABSENCE OF EXEMPT INCOME. RELIANCE IN THIS REGARD CAN BE PLACED ON THE DECISION OF SPECIAL BENCH OF ITAT, HYDERABAD IN THE CASE OF ACIT VS. PROGRESSIVE CONSTRUCTIONS LTD. 92 TAXMANN.COM 104. THE DECISION OF THE LEARNED CIT (APPEALS) IS IN CONSONANCE WITH THE RATIO LAID DOWN IN THE SPECIAL BENCH (SUPRA). THEREFORE, WE DO NOT FIND 4 IT A NO. 314 /BANG/201 8 ANY REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LEARNED CIT (APPEALS). HENCE THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 31ST DAY OF MAY, 201 8 . SD/ - (N.V. VASUDEVAN) JUDICIAL MEMBER SD/ - ( INTURI RAMA RAO ) ACCOUNTANT MEMB ER BANGALORE, DT. 31 .05.2018. *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL BANGALORE.