ITO, New Delhi V. M/s. Richmond Park Property Management Service Pvt. Ltd., New Delhi

ITA 3655/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3485 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 06-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F, NEW DELHI BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA NO. 3655/DEL/2017 : ASSTT. YEAR : 2012-13 ITO WARD-21(3), NEW DELHI VS M/S. RICHMOND PARK PROPERTY MANAGEMENT SERVICE PVT. LTD., 9 TH FLOOR DLF CENTRE, SANSAD MARG, NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AACCR0095H ASSESSEE BY : SH. SATYAJEET GOEL, CA REVENUE BY : SH. RAMESH KUMAR, SR. DR DATE OF HEARING: 05.11.2020 DATE OF PRONOUNCEMENT: 11.11.2020 ORDER PER AMIT SHUKLA, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE A GAINST THE ORDER OF THE LD. CIT(A)-16, NEW DELHI, DATED 01 .03.2017. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE REVENU E: 1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L D. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS . 1,89,28,916/- U/S 14A OF THE INCOME TAX ACT, 1961 IGNORING CBDT CIRCULAR NO. 5/2014 WHEREIN IT ISSUED A CLARIFICATION THAT RULE 8D READ WITH SECTION 14A OF THE INCOME TAX ACT, 1961 PROVIDES FOR DISALLOWANCE OF EXPENDITURE EVEN WHERE TAXPAYER IN A PARTICULAR YEAR HAS NOT EARNED ANY EXEMPT INCOME. ITA NO. 3655/DEL/2017 RICHMOND PARK PROPERTY MANAGEMENT SERV ICE P. LTD. 2 3. AT THE OUTSET, THE UNCONTROVERTED FACTS BROUGHT TO THE NOTICE OF THE BENCH THAT THE ASSESSEE HAS NEITHER E ARNED ANY EXEMPT INCOME NOR DEBITED AN EXPENSES IN THE P&L AC COUNT PERTAINING TO EXPENDITURE. 4. THE REVENUE HAS FILED APPEAL BEFORE THE TRIBUNAL OWING TO CBDT CIRCULAR NO.5/2014 DATED 11.02.2014. 5. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF CIT VS. HOLCIM INDIA PVT. LTD. IN ITA NO.468/2014 DATED 05. 09.2014, MAXOPP INVESTMENT LTD. VS. CIT (2012) 347 ITR 272 ( DEL) AND CHEMINVEST LTD. VS. CIT (2009) 317 ITR 86 (DEL) HAS CATEGORICALLY HELD THAT EARNING OF EXEMPT INCOME IS A PRE- REQUISITE FOR DISALLOWANCE U/S 14A. 6. RESPECTFULLY FOLLOWING THE RATIO OF THE HONBLE JURISDICTIONAL HIGH COURT, WE HEREBY HOLD THAT NO D ISALLOWANCE U/S 14A IS CALLED FOR IN THE INSTANT CASE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/11/2020. SD/- SD/- (DR. B. R. R. KUMAR) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11/11/2020 *SUBODH/BINITA* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR