DCIT 10(1), MUMBAI V. SUPREME REALTY P.LTD, MUMBAI

ITA 4265/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2780 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 16-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J SARAVANAN
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 4265/MUM/2014 (ASSESSMENT YEAR:2009-10) DCIT 10(1), 455, 4 TH FLOOR, AAYKAR BHAVAN, MUMBAI 400 020 APPELLANT VS. M/S. SUPREME REALTY PVT. LTD. DHEERAJ ARMA, 4 TH FLOOR, ANANT KANKAR MARG, STATION ROAD, BANDRA (E), MUMBAI 400051 RESPONDENT PAN: AALCS0761J /BY APPELLANT : SHRI J. SARAVANAN, D.R. /BY RESPONDENT :SHRI ANUJ KISNADWALA, A.R. /DATE OF HEARING : 28.06.2016 /DATE OF PRONOUNCEMENT : 30.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-21, MUMBAI, DATED 12.03.2014 FOR A.Y. 2009-10 ON FOLLOWING GROUNDS: ITA NO.4265/MUM/14 A.Y. 09-10 [DCIT VS. SUPREME REA LTY P. LTD.] PAGE 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADD ITION MADE BY THE AO OF RS.2,74,56,810/- U/S.14A R.W.S. 8 D OF THE IT RULES 1962 BY RELYING ON THE BOMBAY HIGH COU RT DECISION IN THE CASE OF DELITE ENTERPRISES IS ERRON EOUS AS IN THE CASE, IN ABSENCE OF WXMPT PROFIT THE HON'BLE BOMBAY HIGH COURT DID NOT ANSWER THE QUESTION ON ME RIT. 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT(A) ERRED IN CONSIDERING THE CASE OF DELITE ENTERPRISES WHERE FACTS OF THE CASE ARE DIFF ERENT FROM THE FACTS OF THIS CASE AS THE YEAR INVOLVED IN THOSE APPEALS WAS FOR YEARS WHEN RULE D WAS NOT ON STATUT E. 1.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT(A) ERRED IN NOT APPRECIATING THE CIRCULAR NO.5 OF 2014 ISSUED BY THE CBDT WHEREIN IT IS CLARIFIED THAT EVEN WHERE EXEMPT INCOME IS NOT EARN ED DURING THE YEAR HOWEVER THE INVESTMENT IS SUCH WHER E EXEMPT INCOME IS LIKELY TO ARISE DISALLOWANCE U/S.1 4A SHOULD BE MADE.' 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF INVES TMENT IN REAL ESTATE. NOW ISSUE BEFORE US IS WITH REGARD S TO DISALLOWANCE OF 2,74,56,810/- UNDER THE PROVISIONS OF SECTION 14A OF THE ACT OUT OF EXPENSES CLAIMED IN P ROFIT AND LOSS ACCOUNT. ASSESSING OFFICER DISALLOWED THE SAI D AMOUNT UNDER THE PROVISIONS OF SECTION 14A OF THE ACT OUT OF EXPENSES CLAIMED IN P&L ACCOUNT CONSIDERING THEM AS EXPENSES INCURRED FOR EARNING INCOME EXEMPT U/S.10( 2A) OF THE ACT. 2.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) GRA NTED RELIEF TO THE ASSESSEE BY FOLLOWING THE DECISION OF HONBLE ITA NO.4265/MUM/14 A.Y. 09-10 [DCIT VS. SUPREME REA LTY P. LTD.] PAGE 3 HIGH COURT IN CASE OF CIT VS. DELITE ENTERPRISES IN ITA NO.110 OF 2009, WHEREIN IT HAS BEEN HELD THAT NO DISALLOWANCE U/S.14A IS PERMITTED IF THERE IS NO TA X FREE INCOME EARNED BY ASESSEE FOR THE YEAR UNDER CONSIDE RATION. FACTS OF M/S. DELITE ENTERPRISES (SUPRA) ARE SIMILA R TO THE ASSESSEES CASE BECAUSE ASSESSEE HAS NOT EARNED ANY TAX FREE INCOME NOR IS EXEMPTION U/S.10(2A) OF THE ACT CLAIM ED BY ASSESSEE. NOTHING CONTRARY WAS BROUGHT TO OUR KNOW LEDGE ON BEHALF OF REVENUE, SO, FACTS BEING SIMILAR, WE ARE NOT INCLINED TO INTERFERE WITH THE ORDER OF CIT(A) WHO HAS DECID E THE APPEAL IN FAVOUR OF ASSESSEE BY FOLLOWING THE RATIO OF M/S. DELITE ENTERPRISES (SUPRA), SAME IS UPHELD. 3. AS A RESULT, APPEAL FILED BY REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 30 TH DAY OF JUNE, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 30/06/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&