DCIT, New Delhi V. M/s. Mahagun Real Estate Pvt. Ltd., New Delhi

ITA 406/DEL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8792 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 25-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SOUBHAGYA AGARWAL
• Keywords: Earning of tax free income; Tax effect
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E , NEW DELHI BEFORE SH. BHAVNESH SAINI , JUDICIAL MEMBER & DR. B. R. R. KUMAR , ACCOUNTANT MEMBER ITA NO. 406/DEL/2017 : ASSTT. YEAR : 201 2 - 1 3 D C IT, CIRCLE - 16 (1), NEW DELHI VS M/S MAHAGUN REAL ESTATE PVT. LTD., B - 66, 1 ST FLOOR, VIVEK VIHAR, NEW DELHI - 110095 (APPELLANT) (RESPONDENT) PAN NO. AA FCM4203R ASSESSEE BY : SH. SOUBHAGYA AGARWAL, ADV. REVENUE BY : MS. RINKU S INGH , SR. DR DATE OF HEAR ING: 08 . 07 .201 9 DATE OF PRONOUNCEMENT: 09 .07 .201 9 ORDER PER B. R. R. KUMAR , A CCOUNTANT M EMBER : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) - 6 , DELHI DATED 0 7.1 1.2016 . 2. THE REVENUE H AS RAISED THE FOLLOWING GROUNDS : 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS. 52 ,89,427 / - U/S 14 A R.W. R 8D OF THE INCOME TAX ACT 1961 (THE ACT) WITHOUT CONSIDERING LEGISLATIVE INTEND OF INTRODUCING SECTION 14A BY THE FINANCE ACT 2001 AS CLARIFIED BY THE CBDT CIRCULAR NO. 5/2014 DATED 10.02.2014? 2. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELET ING THE DISALLOWANCE OF RS.52,89,427/ - U/S 14A OF THE ACT BY IGNORING LEGISLATIVE INTEND OF SECTION 14A THAT DISALLOWANCE U/S 14A OF THE ACT IS NOT DEPENDENT UPON EARNING OF EXEMPT INCOME AS EXPLAINED VIDE CBDT CIRCULAR NO. 5/2014 DATED 10.02.2014? 3. WHE THER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE DISALLOWANCE OF RS. 52,89,427/ - U/S 14 A OF THE ACT WITHOUT CONSIDERING LEGAL PRINCIPLE THAT ALLOWABILITY OR DISALLOWABILITY OF EXPENDITURE UNDER THE AC T IS NOT CONDITIONAL UPON THE EARNING OF THE INCOME AS UPHELD BY HON BLE SUPREME COURT IN CASE OF CIT VS RAJENDRA PRASAD MOODY (1978) 115ITR 519? 4. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN NOT UPHOLDIN G THE DISALLOWANCE U/S 14A R.W. R 8D OF THE INCOME TAX ACT 1961 AMOUNTING TO RS. 52,89,427/ - WITHOUT CONSIDERING RATIO ITA NO . 406 /DEL /2016 MAHAGUN REAL ESTATE PVT. LTD. 2 DECIDENDI AS UPHELD IN CASES OF CIT VS WALFORT SHARE AND STOCK BROKERS P LIMITED (2010) 326 ITR 1 (SC) AND MAXOPP INVESTMENT VS CIT [2012 ] 347 ITR 272 (DELHI) ON APPLICATION OF PROVISIONS OF SECTION 14 A OF THE ACT? 3. ACCORDING TO CIRCULAR NO. 03/2018 DATED 11/07/2018, THE CBDT IN SUPERSESSION OF EARLIER INSTRUCTIONS HAS DIRECTED THAT DEPARTMENT S APPEALS BEFORE ITAT SHALL NOT BE FILED I N CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMIT OF RS. 20 LACS. THE TAX WILL NOT INCLUDE ANY INTEREST THEREON. IT IS FURTHER CLARIFIED THAT IF IN THE CASE OF AN ASSESSEE, DISPUTED ISSUES ARISE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SO SPECIFIED. 4. ADMITTEDLY, IN THE DEPARTMENTAL APPEAL, THE TAX EFFECT IS LESS THAN RS. 20 LACS, THEREFORE, DEPARTMENT AL APPEAL IS NOT MAINTAINABLE. THE LD. DR COULD NOT BRING TO OUR NOTICE ANY EXCEPTIONS MENTIONED IN THE SAID CIRCULAR. 5. IN THE RESULT , THE APPEAL OF THE REVENUE IS DISMISSED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 09 .07.2019) SD/ - SD/ - ( BHAVNESH SAINI ) ( B. R. R. KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 09 /07 /2019 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR