ADDL. CIT, SPECIAL RANGE- 9, NEW DELHI V. TOURISM FINANCE CORPORATION OF INDIA LTD., NEW DELHI

ITA 3916/DEL/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3928 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 23-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH SINGH
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI B BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING ) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.3916/DEL/2018 ASSESSMENT YEAR : 2014-15 ADDL. CIT, SPECIAL RANGE-9, C.R. BUILDING, NEW DELHI-110002 VS M/S TOURISM FINANCE CORPORATION OF INDIA LTD. 13 TH FLOOR, IFCI TOWER, 61, NEHRU PLACE, DELHI-110019 PAN-AAACT07065 APPELLANT RESPONDENT APPELLANT BY SH. JAGDISH SINGH, SR. DR RESPONDENT BY NONE DATE OF HEARING 07 .10.2021 DATE OF PRONOUNCEMENT 08 . 10 .2021 ORDER PER SANJAY GARG, JUDICIAL MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENU E AGAINST THE ORDER DATED 26.02.2018 OF THE LD. COMMI SSIONER OF INCOME TAX (APPEALS)-16, NEW DELHI, (HEREINAFTER REF ERRED TO ITA NO. 3916/DEL/2018 2 | P A GE (CIT(A)) FOR THE ASSESSMENT YEAR 2014-15. THE ASS ESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- THE LD. CIT(A) ERRED IN LAW AND ON THE FACTS OF TH E CASE IN NOT APPRECIATING THE FACT THAT ASSESSING OF FICER MADE THE DISALLOWANCE OF RS.6,37,20,660/- IN ACCORDANCE WITH SEC. 14A R.W.R. 8D OF THE ACT ONLY. 2. AT THE TIME OF HEARING NOBODY WAS APPEARED ON BE HALF OF THE ASSESSEE. THEREFORE, THIS APPEAL IS BEING DE CIDED ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEA RING THE LEARNED DR. 3. A PERUSAL OF THE ABOVE GROUND OF APPEAL WOULD S HOW THAT THE REVENUE MOVED THIS APPLICATION AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S 14A OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO THE ACT) R.W.R.8D OF THE INCOME TAX RULES, 1962 (HEREINAFTER REFERRED TO THE RULES). 4. WE HAVE GONE THROUGH THE ORDER OF THE LD. CIT(A ). THE LD. CIT(A) HAS GIVEN A DETAILED FINDING THAT TH E ASSESSING OFFICER HAS NEITHER STATED THAT THE SUO-MOTO DISALLOWANCE OF RS.44,78,033/- MADE BY THE APPELLANT WAS NOT ADEQUAT E NOR ITA NO. 3916/DEL/2018 3 | P A GE FOUND ANY FAULT IN THE WORKING OF THE APPELLANT. TH E RELEVANT PART OF THE ORDER OF THE LD. CIT(A) IS REPRODUCED A S UNDER:- I HAVE CAREFULLY CONSIDERED THE FINDING OF THE ASSESSING OFFICER, SUBMISSION OF THE APPELLANT, CAS E RELIED UPON AND EXTANT LAW ON THIS POINT. THE DISALLOWANCE OF EXPENSES U/S 14A R.W. RULE 8D IN RESPECT OF EXPENSES RELATED TO TAX EXEMPT INCOME. FROM A PLAIN READING OF SECTION 14A(1) , IT IS CLEA R THAT THE OBJECTIVE BEHIND THE PROVISION IS TO DISALLOW O NLY SUCH EXPENSE WHICH IS RELATABLE TO EXEMPT INCOME. WHILE THERE IS NO DOUBT THAT THE METHOD FOR DETERMINING AMOUNT EXPENDITURE IN RELATION TO INCOM E NOT INCLUDIBLE IN TOTAL INCOME IS AVAILABLE IN RULE 8D OF THE INCOME TAX RULES, 1962. THE CASE OF THE APPELLA NT, IT HAS ALREADY DISALLOWED RS.44,78,033/- AS EXPENS E FOR EARNING OF EXEMPT INCOME OF RS.140,30,371/-. TH E AO HAS NEITHER STATED THAT THIS SUO-MOTO DISALLOWANCE MADE BY THE APPELLANT IS NOT ADEQUATE NOR FOUND ANY FAULT IN THE WORKING OF THE APPELLANT. THE AO IS REQUIRED TO FIRST SATISFY HIMSELF / HERSELF BEFORE EMBARKING ON THE DISALLOWANCE U/S 14A R.W. RULE 8D. THE MATTER HAS BEEN DISCUSSED IN DETAIL BY CIT(A)-3 9, NEW DELHI IN APPEAL NO. 87/15-16 FOR THE ASSESSMENT YEAR 2012-13 VIDE ORDER DATED 22-12-2016, WHEREIN I T WAS HELD THAT THE APPELLANT HAS NOT INVESTED ANY INTEREST BEARING FUNDS IN INVESTMENTS WHICH RESULTE D IN INCOME NOT CHARGEABLE TO TAX. I HAVE SEEN THE SUBMISSIONS AND SUPPORTING DETAILS AND DOCUMENTS, WHICH REVEAL THAT THE APPELLANT HAD OWN FUNDS EXCEEDING THE BORROWED FUNDS AND THERE IS NET INTER EST INCOME (DIFFERENCE BETWEEN INTEREST INCOME AND INTEREST EXPENDITURE). ACCORDINGLY, ON THE BASIS OF FACTS, FIGURES, PAST APPELLATE DECISIONS, AND JUDICIAL DECISIONS IN THE ITA NO. 3916/DEL/2018 4 | P A GE MATTER, I FIND THAT APPELLANTS SUO MOTO DISALLOWAN CE FOR RS. 44,78,033/- IS REASONABLE. THE DISALLOWANCE OF RS.4478033/- IS CONFIRMED AND THE BALANCE IS DELETED. 5. THE LD. DR HAS NOT POINTED OUT ANY FAULT IN THE ORDER OF THE LD. CIT(A) WARRANTING OUR INTERFERENCE. MOREO VER, IT HAS ALSO NOT BEEN BROUGHT TO OUR KNOWLEDGE, WHETHER ANY APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT AGAINST THE ORDER OF THE LD. CIT(A) ON IDENTICAL ISSUE FOR THE ASSESSMENT YEAR 2 012-13. 6. IN VIEW OF THIS, WE DO NOT FIND ANY REASON TO I NTERFERE WITH THE ABOVE ORDER OF THE LD. CIT(A). THERE IS NO MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY D ISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 08 /10/2021. SD/- SD/- (ANIL CHATURVEDI) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI; DATED: 08 / 10/2021 . F{X~{T F{X~{T F{X~{T F{X~{T ITA NO. 3916/DEL/2018 5 | P A GE COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI