DCIT- CC- 3(3),CENTRAL RANGE-3, MUMBAI V. WELSPUN ENERGY PVT. LTD., MUMBAI

ITA 3174/MUM/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3486 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 14-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA
• Assessee Lawyers: ROMIT JAIN
• Keywords: Earning of tax free income; Tax effect
• Section: 14A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 3174/MUM/2018 (ASSESSMENT YEAR 2013-14) DCIT, CC-3(3) CENTRAL RANGE-3 ROOM NO. 1923 19 TH FLOOR AIR INDIA BUILDING NARIMAN POINT MUMBAI-400 021. VS. M/S. WELSPUN ENERGY PRIVATE LIMITED 7 TH FLOOR, WELSPUN HOUSE, KAMALA CITY, SENAPATI BAPAT MARG LOWER PAREL MUMBAI-400 013. PAN : AAACW2876K (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI ROMIT JAIN DEPARTMENT BY SHRI T.S. KHALSA DATE OF HEARING 02.03.2021 DATE OF PRONOUNCEMENT 02.03.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDE R OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [IN SHORT LEAR NED CIT(A)] DATED 1.2.2018 AND PERTAINS TO ASSESSMENT YEAR 2013-14. 2. THE GROUNDS OF APPEAL READ AS UNDER :- 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE AO U/S 14A OF THE ACT RWR 8D(2)(II) BY HOLDING THAT OWN INTEREST FREE FUNDS AVA ILABLE WITH THE ASSESSEE ARE MORE THAN THE AMOUNT OF INVESTMENT MADE, EVEN THOU GH THE CBDT CIRCULAR NO 5/2014 DATED 11.02.2014 DOES NOT SPECIF Y ANY SUCH EXCLUSION'. 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN RESTRICTING THE DISALLOWANCE U/S 14A RWR 8D(2)(III) TO THE EXTENT OF EXEMPT INCOME EARNED DURING THE YEAR, NOT APPRECIATING THE FACT THAT THE CBDT CIRCULAR NO 5/2014 DATED 11.02.2014 DOE S NOT MENTION THAT THE DISALLOWANCE U/S 14A OF THE IT ACT SHOULD BE RESTR ICTED TO THE AMOUNT OF EXEMPT INCOME EARNED DURING THE YEAR'. M/S. WELSPUN ENERGY PRIVATE LIMITED 2 3. AT THE OUTSET IT IS NOTED THAT THAT THE TAX EFFE CT IN THIS CASE IS BELOW THE LIMIT OF RS. 50,00,000 FIXED BY CBDT VIDE CIRCULAR NO. 17/2019 DATED 8/8 2019 FOR FILING APPEAL BEFORE THE ITAT. HENCE THIS APPEAL BY THE REVENUE IS NOT MAINTAINABLE. THE ADDITION MADE BY THE AO IS RS. 1, 58,15,456/-. THE LEARNED CIT(A) HAS SUSTAINED THE ADDITION TO THE EXTENT OF RS. 75,32,723/-. 4. LD DR COULD NOT DISPUTE THAT THE TAX EFFECT IS B ELOW THE SAID LIMIT. HE COULD NOT POINT OUT THAT THE APPEAL FALLS IN ANY OF THE EXCEPTIONS CARVED IN SAID CIRCULAR. 5. UPON CAREFUL CONSIDERATION WE FIND THAT AS THE T AX EFFECT IS BELOW THE LIMIT FIXED BY CBDT FOR FILING APPEALS BEFORE THE I TAT, THIS APPEAL BY THE REVENUE IS LIABLE TO BE DISMISSED IN LIMINE. THE RE VENUE WILL HAVE LIBERTY TO SEEK RESTORATION OF THE APPEAL IF THE TAX EFFECT IS FOUND TO BE BEYOND THE ABOVE LIMIT. 6. ACCORDINGLY THE APPEAL STANDS DISMISSED AS SUCH. PRONOUNCED IN THE OPEN COURT ON 2.3.2021. SD/- SD/- (AMARJIT SINGH) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNT ANT MEMBER MUMBAI; DATED : 02/03/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI