Starland procon Pvt Ltd, Howrah V. INCOME TAX OFFICER WARD 9(4) KOLKATA , KOLKATA

ITA 395/KOL/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 5296 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 07-07-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Set aside
• Section: 14A; 250; 48

Judgement Text

1. ITA No. 395/Kol/2022 AY 2014-15 Starland procon P.Ltd. आयकर अपील य अ धकरण, कोलकाता पीठ ‘B-SMC’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL,KOLKATA B-SMC, KOLKATA सम : ी मनीष बोरड, लेखा सद य Before: Shri Manish Borad, Accountant Member आयकर अपील सं.य/ ITA No. 395/ कोल /2022 नधा रण वष ः Assessment Year:2014-15 M/s. Starland Procon (P) Ltd, 48 Dobson Road, Howrah-711 101. बनाम V/s. Income Tax Officer, Ward 9(4), Kolkata, P-7 Chowringhee Square, Kolkata-700 069. PAN: AARCS 2669F अपीलाथ /Appellant .. यथ /Respondent अपीलाथ क ओर से/By Appellant None यथ क ओर से/By Respondent Shri Vijay Kumar, Add. CIT, Ld. DR स ु नवाई क तार ख/Date of Hearing 15-09-2022 घोषणा क तार ख/ Date of Pronouncement 20-09-2022 आदेश /O R D E R This appeal filed by the assessee pertaining to the A.Y. 2014-15 is directed against the order passed u/s. 250 of the Income-tax Act, 1961 ( hereinafter referred to as ‘the Act’ ) dt. 13-04-2022 of ld. Commissioner of Income-tax ( in short hereinafter referred to as the ld. CIT(Appeals), National Faceless Appeal Centre (NFAC), Delhi, which is arising out of assessment order dt. 24-01-2017 passed u/s. 2. ITA No. 395/Kol/2022 AY 2014-15 Starland procon P.Ltd. 143(3) of the Income-tax Act, 1961 ( hereinafter referred to as ‘the Act’ ) passed by the I.T.O, Ward-9(4), Kolkata. 2. Registry has informed that the appeal is time barred by 26 days. However, looking to the shortness of delay and larger interest of justice, the delay is condoned and the appeal is admitted for adjudication. 3. When the case was called, none appeared on behalf of assessee. A perusal of file shows that notice of hearing was sent through RP/AD, which has been returned unserved on two occasions with the remark ‘No such addressee in this address’ . I, therefore, deem it proper to adjudicate the appeal on merits ex parte assessee on the basis of material available on record and with the assistance of the ld. DR. 4. The assessee has raised the following grounds of appeal:- 1. That the disallowance in the facts and circumstances of the case of the Appellant company and in accordance with legal position enunciated by decisions of various High Courts in this regard that income u/s. 14A of the Act is to be restricted to the amount of exempt income claimed u/s 10(34) of the Act is a good law in the present assessment year under consideration. That the CIT(A) erred in confirming the disallowance made by the Ld AO for an amount ofRs.2,61,250/- u/s 14A of the Income Tax Act, and held that the amendment made by the Finance At 2022 as retrospective which is contrary to the law and therefore to be deleted. 2.That the CIT(A) erred in passing the order, confirming the 3. ITA No. 395/Kol/2022 AY 2014-15 Starland procon P.Ltd. disallowance made by the Ld AO, without confronting the draft order with the assessee and giving a chance to the assessee to rebut the same. The Ld CIT (A) has thereby violated the principal of natural justice by not providing a chance of personal hearing to the assessee. 3.That the order passed by the Assessing Officer and upheld by CIT (A) is bad in law, as the Ld CIT (A) has failed to adjudicate the grounds of appeal and written submission of the assessee comprehensively. The assessee pointed out to the Ld AO that no notional expenditure can be disallowed U/s 14A, however the Ld CIT (A) has not considered and adjudicated on this ground. 4.The AO was not empowered to invoke the provisions contained under section 14A read with Rule 8D in a mechanical manner without recording his satisfaction that working given by assessee company is not correct therefore disallowance made by the AO and confirmed by the Id. CIT CA) on the basis of invalid satisfaction as to the correctness of the claim of the assessee is bad in law. 5. That the Appellant Company craves leave to alter, amend, vary and/or add any of the grounds of appeal at any time hereinafter. 5. The sole grievance of the assessee is that the disallowance made u/s. 14A of the Act/R.W.R 8D of the I.T Rules, 1962 is not called for since no exempt income was not earned by the assessee. 6. I have heard the ld. Departmental Representative and perused the record placed before me. On going through the records, which includes the P.B filed by the assessee, I notice that during the year the assessee has not earned any exempt income from the investments made by it. This fact has not been controverted by the revenue authorities below and before us. As per the ratio laid down by the 4. ITA No. 395/Kol/2022 AY 2014-15 Starland procon P.Ltd. Hon’ble High Court of Delhi in the case of PCIT Vs. M/s. Era Infrastructure (I) Ltd in ITA 204/2022 dt. 20-07-2022 that no disallowance is to be made u/s. 14A of the Act in case the assessee has not earned any tax free income/exempt income during the year from such investments made by it. This ratio has also been followed by the Tribunal in the case Babul Fiscal Services P.Ltd in ITA No. 318/Kol/2022 dt. 02-08-2022. Respectfully following the same, I hold that since in the instant case also undisputedly there is no exempt income earned by the assessee, the ld.AO was not justified in making disallowance u/s. 14A/R.W.R 8D. I, therefore, set aside the finding of the ld. CIT(A) and delete the impugned addition of Rs.2,61,250/- made by the ld.AO u/s. 14A of the Act and allow ground nos. 1 to 4 raised by the assessee. 7. Ground no. 5 is general in nature, which needs no adjudication. प रणामत: नधा रती क अपील मंज ू र क जाती है। 8. In the result, the appeal of the assessee is allowed. आदेश ख ु ले यायपीठ म दनांक... /09/2022 को उ घो षत। Order pronounced in the open court on..20/09/2022 Sd/- मनीष बोरड, लेखा सद य (MANISH BORAD) दनांक /Dated : 20-09-2022 ACCOUNTANT MEMBER 5. ITA No. 395/Kol/2022 AY 2014-15 Starland procon P.Ltd. **PP/SPS आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1.अपीलाथ /Appellant/M/s. Starland Procon (P) Ltd, 48 Dobson Road, Howrah-711 101. 2. यथ /Respondent/Income Tax Officer, Ward 9(4), Kolkata, P-7 Chowringhee Square, Kolkata-700 069. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त- अपील / CIT (A) 5. वभागीय त न ध, आयकर अपील य अ धकरण कोलकाता / DR, ITAT, Kolkata 6. गाड फाइल / Guard file. By order/आदेश से, /True Copy/ Assistant Registrar ITAT, Kolkata