Dy. Commissioner of Income Tax , Circle-2(2), Hyderabad V. Head Infotech India Private Limited, Hyderabad

ITA 464/Hyd/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5928 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-B
• Assessment Year: 2013-2014
• Appeal Filed On: 05-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Commercial expediency
• Section: 14A; 40(a)(ia); 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. M OH AN ALANKAMONY , ACCOUNTANT MEMBER I.T.A. NO. 464 /HYD/201 8 ASSESSMENT YEAR: 20 1 3 - 14 DY. COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), HYDERABAD. VS HEAD INFOTECH INDIA PVT. LTD., HYDERABAD. PAN AABCH 6629 L (APPELLANT) (RESPONDENT) DATE OF HEARING : 1 5 - 0 9 - 20 20 DATE OF PRONOUNCEMENT : 29 - 0 9 - 20 20 O R D E R PER SMT. P. MADHAVI DEVI, J.M. : THIS IS REVENUE S APPEAL FOR THE AY.20 1 3 - 1 4 AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 , HYDERABAD, DATED 01/12/ 201 7 . THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDER: 1) THE CIT(A) ERRED IN BOTH FACTS OF THE CASE AND IN LAW. 2) WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) IS CORRECT IN LAW IN ALLOWING THE FINANCE EXPENSES EVEN THOUGH THE SAME WA S NOT INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE COMPANY. FOR REVENUE : SHRI S RAJAT MITRA FOR ASSESSEE : SHRI PAWAN KUMAR CHAKRAPANI ITA NO. 464 /HYD/201 8 HEAD INFOTECH INDIA PVT. LTD., HYD. : - 2 - : 3) WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) IS CORRECT IN LAW ALLOWING THE FINANCE EXPENSES EVEN THOUGH THERE WAS NO COMMERCIAL EXPEDIENCY. 4) WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE C1T(A) IS CORRECT IN LAW IN DEL ETING THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE U/S 14A ON THE GROUND THAT NO EXEMPT INCOME WAS RECEIVED DURING THE PREVIOUS YEAR WHICH IS AGAINST THE CBDT CIRCULAR NO. 05 /2014. 5) ANY OTHER GROUND THAT MAY URGE DURING THE COURSE OF APPELLATE PROCEEDI NGS. 2. AT THE TIME OF HEARING THROUGH VIDEO CONFERENCING, THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE ABOVE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE NOT EMANATING EITHER FROM THE AOS ORDER OR FROM THE CIT(A)S ORDER. THE LD. DR ALSO A DMIT TED THAT THESE GROUNDS ARE NOT EMANATING FROM THE ASSESSMENT ORDER, AS THE ADDITIONS MADE BY THE AO WERE U/S 40(A)(IA) AND 36(1)( VA) OF THE ACT AND NO DISALLOWANCE/ ADDITION WAS MADE U/S 14A OF THE ACT . IN VIEW OF THE SAME, THE APPEAL OF THE REVENUE IS D ISMISSED AS NOT MAINTAINABLE. 3. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER P RONOUNCED IN THE OPEN COURT ON 29 TH SEPTEMBER , 20 20 SD/ - SD/ - ( A . M OH AN ALANKAMONY ) ( P. MADHAVI DEVI ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDE RABAD, DATED : 29 TH SEPTEMBER , 20 20 KV ITA NO. 464 /HYD/201 8 HEAD INFOTECH INDIA PVT. LTD., HYD. : - 3 - : COPY TO : 1. DCIT, CIRCLE 2(2), ROOM NO. 513, 5 TH FLOOR, SIGNATURE TOWERS, KONDAPUR, HYDERABAD. 2. M/S HEAD INFOTECH INDIA PVT. LD., P. NO. 17, LEFT WING, 6 TH FLOOR, AURIGA BLOCK, THE V SOFTWARE UNIT LAYOUT, MADHAPUR, HYDERABAD. 3 . CIT(A PPEALS ) - 2 , HYDERABAD . 4 . THE PR. CIT - 2 , HYDERABAD. 5 . D.R. ITAT, HYDERABAD. 6 . GUARD FILE.