Shah Govardhandas Bhikaridas, Jalgaon V. Income Tax Officer, Ward-2(4), Jalgaon, Jalgaon

ITA 473/PUN/2023

AI Insights

The case involves Shah Govardhandas Bhikaridas (HUF), who appealed against the order of the CIT(A) confirming a disallowance made by the Assessing Officer under section 14A of the Income-tax Act, 1961. The disallowance was initially made because the Assessing Officer noted that the assessee earned exempt income. However, the assessee contested that no dividend was received during the year. The Tribunal, referencing decisions from the Delhi High Court, particularly Cheminvest Ltd. vs. CIT, ruled in favor of the assessee, stating that without any exempt income, the disallowance under section 14A could not stand.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124137 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 08-06-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 23-04-2023
• Other Referred Cases: Cheminvest Ltd. vs. CIT, CIT vs. Holcim India P. Ltd., Pr.CIT Vs. Era Infrastructure (India) Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. /ITA No.473/PUN/2023 नधा रण वष / Assessment Year : 2014-15 Shah Govardhandas Bhikaridas (HUF), 88, Gujarathi Galli, Chopda, Dist. Jalgaon – 425107, Maharashtra PAN : AAEHS8978P Vs. ITO, Ward-2(4), Jalgaon Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP: This appeal by the assessee arises out of the order dated 28-03-2023 passed by the CIT(A) in National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2014-15. 2. The only issue raised in this appeal is against the confirmation of disallowance of Rs.1,59,879/- made by the Assessing Officer (AO) u/s.14A of the Act. 3. Briefly stated, the facts of the case are that the AO recorded in para 5.3 of his order that the assessee earned exempt income. He, Assessee by Smt. Deepa Khare Revenue by Shri Gurmel Singh Date of hearing 09-06-2023 Date of pronouncement 09-06-2023 ITA No. 473/PUN/2023 Shah Govardhandas Bhikaridas (HUF) 2 therefore, proceeded to compute the disallowance u/s.14A r.w.r 8D. The ld. CIT(A) dismissed the assessee’s appeal after duly noting the assessee’s contention that no dividend was received during the year under consideration. 4. Having heard the rival submissions and gone through the relevant material on record, it is seen that the assessee specifically stated before the ld. CIT(A), as has been recorded on page 5 of the impugned order, that no dividend was received during the year. The Hon'ble Delhi High Court in Cheminvest Ltd. vs. CIT (2015) 378 ITR 33 (Del) has held that if there is no exempt income, there can be no question of making any disallowance u/s 14A of the Act. Similar view has been taken by the Hon'ble Delhi High Court in CIT vs. Holcim India P. Ltd. (2014) 90CCH 081-Del-HC. 5. It is seen that an amendment has been carried out to section 14A by the Finance Act, 2022 providing that the disallowance u/s 14A would be called for notwithstanding no receipt of exempt income during the year. The Hon’ble Delhi High Court in Pr.CIT Vs. Era Infrastructure (India) Ltd. (2022) 448 ITR 674 (Delhi) has held such amendment to be retrospective. In that view of the matter, the case pertaining to the A.Y. 2014-15 under consideration, having no exempt income during the year, would be governed by the ruling ITA No. 473/PUN/2023 Shah Govardhandas Bhikaridas (HUF) 3 in Cheminvest (supra). Respectfully following the precedent, I order to delete the disallowance. 6. In the result, the appeal is allowed. Order pronounced in the Open Court on 09 th June, 2023. Sd/- (R.S.SYAL) VICE PRESIDENT पुणे Pune; िदनांक Dated : 09 th June, 2023 सतीश आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to : 1. अपीलाथ / The Appellant; 2. थ / The Respondent 3. 4. 5. The Pr.CIT concerned DR, ITAT, ‘SMC’ Bench, Pune गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune ITA No. 473/PUN/2023 Shah Govardhandas Bhikaridas (HUF) 4 Date 1. Draft dictated on 09-06-2023 Sr.PS 2. Draft placed before author 09-06-2023 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *