ITD CEMENTATION INDIA LTD., MUMBAI V. DCIT- 14(2)(1), MUMBAI

ITA 3278/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 1289 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 16-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AWUNGSHI GIMSON
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI A.D. JAIN, VICE PRESIDENT AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NOS.3278 & 3279/M/2018 ASSESSMENT YEARS: 2012-13 & 2013-14 M/S. ITD CEMENTATION INDIA LTD., NATIONAL PLASTIC BUILDING, A-SUBHASH ROAD, PARANJAPE B SCHEME, VILE PARLE (EAST), MUMBAI 400 057 PAN: AAACT1426A VS. DEPUTY COMMISSIONER OF INCOME TAX-14(2)(1), MUMBAI (APPELLANT) (RE SPONDENT) ITA NOS.3639 & 3640/M/2018 ASSESSMENT YEARS: 2012-13 & 2013-14 DEPUTY COMMISSIONER OF INCOME TAX-14(2)(1), MUMBAI VS. M/S. ITD CEMENTATION INDIA LTD., NATIONAL PLASTIC BUILDING, A-SUBHASH ROAD, PARANJAPE B SCHEME, VILE PARLE (EAST), MUMBAI 400 057 PAN: AAACT1426A (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIJAY MEHTA, A.R. REVENUE BY : SHRI AWUNGSHI GIMSON, D.R. DATE OF HEARING : 26.09.2019 DATE OF PRONOUNCEMENT : 17.12.2019 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE ABOVE TITLED APPEALS TWO BY THE ASSESSEE AND T HE OTHER TWO BY THE REVENUE HAVE BEEN PREFERRED AGAINST THE ORDER DATED 23.02.2018 OF THE COMMISSIONER OF INCOME TAX (APPEA LS) ITA NOS.3278 & 3279/M/2018 ITA NOS.3639 & 3640/M/2018 M/S. ITD CEMENTATION INDIA LTD. 2 [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEARS 2012-13 & 2013-14. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A) PARTLY CONFIRMING THE DISALLOWANCE TO TH E TUNE OF RS.19,95,000/- AS MADE BY THE AO UNDER SECTION 14A AT RS.2,53,36,000/-. THE LD. CIT(A) WHILE SUSTAINING THE DISALLOWANCE CALCULATED THE SAME UNDER RULE 8D(2)(I II) AT 0.5% OF THE AVERAGE VALUE OF INVESTMENTS. 3. AT THE OUTSET, THE LD. COUNSEL OF THE ASSESSEE S UBMITTED THAT THERE IS NO EXEMPT INCOME EARNED BY THE ASSESS EE DURING THE YEAR AND THEREFORE THERE IS NO QUESTION OF DISA LLOWANCE UNDER SECTION 14A OF THE ACT. IN DEFENCE OF HIS AR GUMENT, THE LD. A.R. RELIED ON THE DECISION OF THE JURISDICTION AL HONBLE BOMBAY HIGH COURT IN THE CASE OF PR. CIT VS. BALLAR PUR INDUSTRIES LTD. IN ITA NO.15 OF 2016 DATED 13.10.20 16 AND PRAYED THAT THE DISALLOWANCE MAY KINDLY BE DELETED IN ENTIRETY. 4. THE LD. D.R., ON THE OTHER HAND, RELIED ON THE O RDER OF AO. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE ASSESSEE HAS NOT RECEIV ED ANY INCOME DURING THE YEAR AND APPARENTLY IN THE FACE O F THESE FACTS, WE ARE OF THE VIEW THAT NO DISALLOWANCE UNDER SECTI ON 14A OF THE ACT R.W. RULE 8D COULD BE MADE. THE ISSUE IS COVE RED IN THE DECISION OF PR. CIT VS. BALLARPUR INDUSTRIES LTD. (SUPRA) WHEREIN THE HONBLE HIGH COURT HAS HELD THAT WHERE THERE IS NO INCOME, NO DISALLOWANCE UNDER SECTION 14A OF THE ACT CAN BE MADE. ACCORDINGLY, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ITA NOS.3278 & 3279/M/2018 ITA NOS.3639 & 3640/M/2018 M/S. ITD CEMENTATION INDIA LTD. 3 ITA NO.3639 & 3640/M/2018 6. SINCE WE HAVE ALLOWED THE APPEALS OF THE ASSESSE E, THE APPEALS OF THE REVENUE BECOME INFRUCTUOUS AND ARE A CCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17.12.2019. SD/- SD/- (VICE PRESIDENT) (RAJESH KUMAR) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 17.12.2019. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.