KARAMTARA STEEL PRIVATE LIMITED (MERGED WITH KARAMTARA ENGINEERING PRIVATE LIMITATE), MUMBAI V. DY. COMMISSIONER OF INCOME TAX WARD 10(1)(2), MUMBAI

ITA 4288/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5628 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 09-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NIGSHEN
• Assessee Lawyers: M K PATEL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.4288/MUM/2017, (A.Y. 2012-13) KARAMTARA STEEL PVT. LTD.. (MERGED WITH KARAMTARA ENGINEERING PVT.LTD.) 705,MORYA LANDMARK II, NEW LINK ROAD, ANDHERI(W), MUMBAI 400 053 PAN: AACCK 5915D ...... APPELLANT VS. DY.COMMISSIONER OF INCOME TAX , WARD 10(1)(2), ROOM NO.209, AAYKAR BHAVAN,M.K.ROAD, MUMBAI-400 020 ..... RESPONDENT APPELLANT BY : SHRI M.K.PATEL RESPONDENT BY : SHRI M.C.OMI NIGSHEN DATE OF HEARING : 04/07/2018 DATE OF PRONOUNCEMENT : 04/07/2018 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO ASSESSMENT YEAR 2012-13 IS DIRECTED AGAINST AN OR DER PASSED BY CIT(A)- 17, MUMBAI DATED 02/03/2017, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143 (3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 20/03/2015. 2 ITA NO.4288/MUM/2017, (A.Y. 2012-13) 2. IN THIS APPEAL THE SOLITARY ISSUE REVOLVES AROUN D A DISALLOWANCE OF RS.9,61,795/- MADE BY THE INCOME TAX AUTHORITIES UN DER SECTION 14A OF THE ACT BY APPLYING RULE 8D(2)(III) OF THE RULES. 3. AT THE TIME OF HEARING, THE LD. REPRESENTATIVE F OR THE ASSESSEE MADE A SINGULAR ARGUMENT TO THE EFFECT THAT SINCE A SSESSEE HAS NOT RECEIVED ANY EXEMPT INCOME DURING THE YEAR UNDER C ONSIDERATION, NO DISALLOWANCE UNDER SECTION 14A OF THE ACT WAS CALLE D FOR IN VIEW OF THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CHEMINVEST LTD. VS. CIT, 378 ITR 33 (DEL). IT HAS BEEN POINTED OU T THAT THE ONLY INVESTMENT MADE BY THE ASSESSEE WAS IN THE SHARES OF ITS SUBSI DIARY COMPANY AND DURING THE YEAR NO DIVIDEND INCOME WAS RECEIVED. I N ORDER TO COMPLETE THE FACTUAL MATRIX, IT HAS ALSO BEEN POINTED OUT TH AT W.E.F. 01/04/2012 THE ASSESSEE COMPANY AS WELL AS ITS SUBSIDIARY INVESTEE COMPANY HAVE MERGED WITH ONE KARAMTARA ENGG. PVT. LTD. AND, THEREFORE, IN THIS VIEW OF THE MATTER THE INVESTMENT IN QUESTION WOULD NEVER GENER ATE ANY INCOME. BE THAT AS IT MAY, IT CLEARLY EMERGES FROM THE DISCUSS ION IN PARA 5.7 OF THE ASSESSMENT ORDER THAT DURING THE YEAR UNDER CONSIDE RATION NO EXEMPT INCOME HAS BEEN RECEIVED AND, THEREFORE, THE RATIO OF THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD.(SUPRA) IS CLEARLY ATTRACTED. 4. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NOT CONT ROVERTED THE FACTUAL MATRIX AND HAS MERELY RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 3 ITA NO.4288/MUM/2017, (A.Y. 2012-13) 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. FOLLOWING THE RATIO OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD.(SUPRA) AND IN THE ABSENCE OF ANY ACTUAL RECEIP T OF EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION, NO EXPENDITURE IS LIABLE TO BE DISALLOWED UNDER SECTION 14A OF THE ACT. IN VIEW OF THE ABOVE, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE ASSESSING OFFICE R IS DIRECTED TO DELETE THE ADDITION OF RS. RS.9,61,795/- MADE UNDER SECTION 14 A OF THE ACT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF HEARING ON 04/07/2 018. SD/- SD/- (PAWAN SINGH ) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 04/07/2018 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI