M/s. Vikash Fastners Pvt. Ltd. , Kolkata V. ITO, Ward-7(2), Kol, Kolkata

ITA 484/KOL/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6710 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-08-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 15-05-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule 8D; Set aside
• Section: 14A

Judgement Text

ITA No. 484/KOL/2023 Assessment Year : 2012-2013 Vikash Fastners Pvt. Limited 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President & Shri Girish Agrawal, Accountant Member I.T.A. No. 484/KOL/2023 Assessment Year: 2012-2013 M/s. Vikash Fastners Pvt. Limited............Appellant Room No. 310, Diamond Prestige, 41A, A.J.C. Bose Road, Kolkata-700017 [PAN: AABCV4998A] -Vs.- Income Tax Officer,................................Respondent Ward-7(2), Kolka, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Miraj D. Shah, A.R., appeared on behalf of the assesseee Shri B.K. Singh, JCIT (Sr. DR), appeared on behalf of the Revenue Date of concluding the hearing : August 10, 2023 Date of pronouncing the order : October 9, 2023 O R D E R Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income ITA No. 484/KOL/2023 Assessment Year : 2012-2013 Vikash Fastners Pvt. Limited 2 Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 31 st March, 2023 passed for A.Y. 2012-13. 2. Though the assessee has taken six grounds of appeal, but in brief, its grievances revolve around a single issue, namely whether a disallowance under section 14A of Rs.3,17,192/- could be made even if there is no tax-free income claim by the assessee. 3. With the assistance of ld. Representatives, we have gone through the record carefully. A perusal of the assessment order dated 27.03.2015 would reveal that ld. Assessing Officer has discussed this issue of disallowance under section 14A. The first two lines are important for the purpose of deciding this appeal and they read as under:- “14A as per Rule 8D: In the course of hearing, it was submitted by the A/R of the assessee that during the relevant year the company had not earned income from dividend”. The ld. Assessing Officer thereafter made reference to the total investment made by the Company and observed that in future year, the assessee will either claim dividend income or long-term capital gain, which will be exempt. Therefore, he commenced his inquiry and harboued a belief that disallowance under section 14A read with Rule 8D deserves to be made. He made an addition of Rs.3,17,192/- under Rule 8D(2)(iii), which ITA No. 484/KOL/2023 Assessment Year : 2012-2013 Vikash Fastners Pvt. Limited 3 was calculated @ 0.5% the average value of investment. This disallowance was made under the Head of ‘Administrative Expenses’ in a way. The Hon’ble Delhi High Court in the case of M/s. Era Infrastructure (India) Limited in ITA No. 204 of 2022 has held that if no tax free income has been claimed by the assessee, then, no disallowance is to be made. In this decision, Hon’ble Delhi High Court has considered the latest position of section 14A introduced by Finance Act, 2022. After considering this, it has observed that unless Hon’ble Supreme Court has set aside the earlier judgment of this Hon’ble High Court, the position of law would be applicable as it is. By respectfully following the judgment of the Hon’ble Delhi High Court, we allow this appeal and delete the disallowance. 4. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on October 9, 2023. Sd/- Sd/- (Girish Agrawal) (Rajpal Yadav) Accountant Member Vice-President(KZ) Kolkata, the 9 th day of October, 2023 Copies to : (1) M/s. Vikash Fastners Pvt. Limited, Room No. 310, Diamond Prestige, 41A, A.J.C. Bose Road, Kolkata-700017 ITA No. 484/KOL/2023 Assessment Year : 2012-2013 Vikash Fastners Pvt. Limited 4 (2) Income Tax Officer, Ward-7(2), Kolka, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (3) Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (4) Commissioner of Income Tax , (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.