DCIT, Circle- 4(1), Gurgaon V. Uniquest Infra Ventures Pvt. Ltd., Gurgaon

ITA 4940/DEL/2018

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 0623 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2022
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 11-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI BEFORE SH. ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SH. NARENDER KUMAR CHOUDHARY, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA No. 4940/Del/2018 (Assessment Year : 2015-16) DCIT Circle – 4(1), Gurgaon PAN : AABUC 2595 C Vs. M/s. Uniquest Infra Ventures Pvt. Ltd., 3 rd Floor, Tower – B, Cyber Greens, Sec-25A, DLF City, Phase – III, Gurgaon (APPELLANT) (RESPONDENT) Assessee by --None-- Revenue by Shri Atiq Ahmed, Sr. D.R. Date of hearing: 29.12.2021 Date of Pronouncement: 05.01.2022 ORDER PER ANIL CHATURVEDI, AM: This appeal filed by the Revenue is directed against the order dated 14.05.2018 of the Commissioner of Income Tax (Appeals)-1, Gurgaon relating to Assessment Year 2015-16. 2. The relevant facts as culled from the material on records are as under : 2 3. Assessee is a company stated to be promoted by UEM Group Berhad and IDFC Bank Limited and is stated to be in the business of conceiving, developing, owning, managing, executing and operating infrastructure projects in India. Assessee electronically filed its return of income for A.Y. 2015-16 on 27.11.2015 declaring total loss of Rs.5,00,47,972/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Act vide order dated 12.12.2017 and the total loss was assessed at Rs. 3,44,07,000/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who vide order dated 14.05.2018 in Appeal No.546/17-18 allowed the appeal of the assessee. Aggrieved by the order of CIT(A), Revenue is now in appeal and has raised the following grounds: 1. “Ld. CIT(A) has erred on fact and in law in deleting the addition of Rs.1,56,40,968/- made by the Assessing Officer under Section 14A of the Act. 2. Ld. CIT(A) has erred on fact and in law in ignoring CBDT Circular No.5 of 2014 dated 11.12.2018 clarifying that disallowance under Rule 8D read with section 14A of the Income Tax Act, 1961 is to be made even when tax payer is a particular in a particular year has not earned any exempt income. 3. That the appellant craves for the permission to add, delete or amend grounds of appeal before or at the time of hearing of appeal.” 4. On the date of hearing none appeared on behalf of the assessee though the notice of hearing was sent to the assessee which was returned undelivered by the postal authorities with the remark that the person has left. Assessee has not placed on 3 record its changed postal address. In view of these facts, we proceed to dispose of the appeal ex-parte qua the assessee after considering the material on record and after hearing the Learned DR. 5. During the course of assessment proceedings and on perusal of the financial statement, AO noticed that assessee had made investment in shares aggregating to Rs.351,92,14,396/-. Assessee was therefore asked to show-cause as to why the disallowance not be made u/s 14A r.w.r 8D of the Income Tax Rules to which assessee inter alia submitted that no dividend income has been earned from the investments, no interest expenditure has been incurred by the company for earning of exempt income and therefore as per the settled law, no disallowance u/s 14A of the Act is warranted. The submissions of the assessee was not found acceptable to AO. AO thereafter by applying the provision of Rule 8D r.w.s 14A of the Act worked out the disallowance u/s 14A of the Act at Rs.1,56,40,968/-. 6. Aggrieved by the order of AO, assessee carried the matter before the CIT(A). CIT(A) deleted the addition made by AO. While deleting the addition, CIT(A) noted that assessee had not earned any exempt income. He therefore after relying on the decision of Hon’ble Punjab and Haryana High Court in the case of CIT vs. Lakhani Marketing (2014) 272 CTR 0265 (P&H) (HC) held that in the absence of any exempt income, no disallowance u/s 14A of the Act can be made. 4 7. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 8. Before us, Learned DR supported the order of AO. 9. We have heard the Learned DR and perused the material available on record. The issue in the present ground is with respect to the disallowance u/s 14A of the Act. We find that CIT(A) while deleting the addition made by AO has given a finding that assessee has not earned any exempt income. He therefore held that no disallowance can be made in the absence of exempt income and for the aforesaid proposition, he relied on the decision of Hon’ble Punjab and Haryana High Court in the case of Lakhani Marketing (supra). Before us, no fallacy in the findings of CIT(A) has been pointed out by the Revenue nor has Revenue placed on record any contrary binding decision in its support. In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed. 10. In the result, appeal of the Revenue is dismissed. Order pronounced in the open court on 05.01.2022 Sd/- Sd/- (NARENDER KUMAR CHOUDHARY) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 05.01.2022 PY* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI