ACIT, Circle- 6(1), New Dlhi V. Clix Finance India Unlimited , New Delhi

ITA 37/DEL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7874 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 02-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH SINGH
• Keywords: Earning of tax free income; Revised return; TDS; Rule 8D
• Section: 14A; 144C

Judgement Text

1 ITA NO. 37/DEL/2018 IN THE INCOME TAX APPELLAT E TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBE R AND MS SUCHITRA KAMBLE, JUDIC IAL MEMBER ITA NO. 37/DEL/2018 ( A.Y 2013-14) (THROUGH VIDEO CONFEREN CING) ACIT ROOM NO. 389, C. R. BUILDING, NEW DELHI (APPELLANT) VS CLIX FINANCE INDIA UNLIMITED (EARLIER KNOWN AS GE CAPITAL SERVICES LTD), E-20, 1 ST FLOOR, HAUZ KHAS, NEW DELHI AAACG0239L (RESPONDENT) APPELLANT BY SH. JAGDISH SINGH, SR. DR RESPONDENT BY SH. SACHIT JOLLY, ADV ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 30/10/2017 PASSED BY CIT (A)-4, NEW DELHI FOR ASSESSMENT YEAR 2013-14. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS. 3,81,25,375/ - MADE ON ACCOUNT OF DISALLOWANCE U/S 14A READ WITH RULE 8D OF THE ACT B Y IGNORING THE FACT THAT THE ASSESSEE HAS INCURRED HUGE EXPENSES IN RELATION TO THE HUGE INVESTMENTS IN SHARES AND MUTUAL FUNDS. DATE OF HEARING 26.08.2020 DATE OF PRONOUNCEMENT 27.08.2020 2 ITA NO. 37/DEL/2018 3. CLIX FINANCE INDIA UNLIMITED I.E. THE ASSESSEE C OMPANY WAS INCORPORATED ON 22/10/1993. THE SAID COMPANY WAS EARLIER KNOWN AS GE CAPITAL SERVICES INDIA. THE ASSESSEE IS A NON BANKING FINANCIAL INS TITUTIONS (NBFC) REGISTERED WITH THE RESERVE BANK OF INDIA. IT OFFERS VARIOUS PRODUCTS IN COMMERCIAL AND RETAIL LENDING. THE ASSESSEE COMPANY FILED ITS RETU RN OF INCOME ELECTRONICALLY ON 29/11/2013 DECLARING LOSS OF RS.79,42,07,926/- A ND CLAIMING A REFUND RS. 11,78,97,140/- ON ACCOUNT OF TDS CREDIT. SUBSEQUEN TLY, THE ASSESSEE FILED REVISED RETURN OF INCOME ON 30/3/2015 DECLARING LOS S OF RS. 77,79,51,423/- AND CLAIMING ENHANCE TDS CREDIT RESULTING IN INCREA SING REFUND TO RS. 12,52,85,552/-. THE ASSESSING OFFICER COMPLETED AS SESSMENT PROCEEDINGS AND PASSED FINAL ASSESSMENT ORDER ON 30/1/2017 U/S 143( 3) READ WITH SECTION 144C AND ASSESSED LOSS WAS DETERMINE AT RS. 71,33,6 3,400/- AFTER MAKING THE FOLLOWING ADJUSTMENTS:- 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE CIT(A) ERRED IN DE LETING THE ADDITION OF RS. 3,81,25,375/- MADE ON ACCOUNT OF DISALLOWANCE U/S 1 4A READ WITH RULE 8D OF THE INCOME TAX ACT AND INCOME TAX RULES BY IGNORING THE FACT THAT THE ASSESSEE HAS INCURRED HUGE EXPENSES IN RELATION TO THE HUGE INVESTMENT IN SHARES AND MUTUAL FUNDS. THE LD. DR RELIED UPON TH E ASSESSMENT ORDER AND THE DECISION OF THE HONBLE APEX COURT IN CASE OF M AXOPP INVESTMENT LTD. VS. CIT 402 ITR 640 (SC) NATURE OF ADJUSTMENT AMOUNT (RS.) LOSS DECLARED BY THE APPELLANT IN ROI 77,79 ,51,423 A. ADDITION ON ACCOUNT OF TPO 2,64,59,651 B. DISALLOWANCE U/S 14A READ WITH RULE 8D 3,81,25,375 ASSESSED LOSS (ROUNDED OFF) 71,33,66,400 3 ITA NO. 37/DEL/2018 6. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A) A ND FURTHER SUBMITTED THAT NO EXEMPT INCOME WAS EARNED DURING THE PRESENT ASSE SSMENT YEAR AND NO EXPENDITURE WAS INCURRED. THE LD. AR RELIED UPON T HE DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS. HOLCIM INDIA PV T. LTD. 272 CTR 282 AND CHEMINVEST LTD. REPORTED AT 371 ITR 23. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IT IS CLEAR FROM THE RECORDS THAT THAT THE RE WAS NO EXEMPT INCOME ATTRIBUTABLE IN THE HANDS OF THE ASSESSEE. THEREFO RE, APPLYING SECTION 14A READ WITH RULE 8D IS NOT APPROPRIATE ON PART OF ASSESSIN G OFFICER. THE CIT(A) RIGHTLY HELD THAT NO EXPENDITURE CAN BE DISALLOWED AGAINST NIL EXEMPT INCOME AND THIS VIEW IS ALSO SUPPORTED BY THE DECISION OF THE JURIS DICTIONAL HIGH COURT OF DELHI IN CASE OF CIT VS. HOLCIM INDIA PVT. LTD. (SUPRA) A ND CHEMNVEST INVESTMENT LTD. (SUPRA). THE HONBLE APEX COURT HAS CLEARLY SE T OUT IN MAXOPP INVESTMENT LTD. (SUPRA) THAT THE EXPENDITURE SHOULD BE ACTUALL Y INCURRED AND THERE SHOULD BE EXEMPT INCOME. BUT IN ASSESSEE CASE THERE IS A C LEAR FINDING BY ASSESSING OFFICER AS WELL AS BY THE CIT(A) THAT THERE IS NO E XEMPT INCOME. THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. 8. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF AUGUST, 2020 . SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL M EMBER DATED: 27/08/2020 R. NAHEED 4 ITA NO. 37/DEL/2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI