DEPUTY COMMISSIONER OF INCOME TAX-9(2)(1), MUMBAI V. CAPITAL FIRST LIMITED, MUMBAI

ITA 5218/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3875 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 10-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTIKEYAN
• Assessee Lawyers: BHAVIN MEHTA
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA , HON'BLE ACCOUNTANT MEMBER ITA NO. 5 218 & 5219 /MUM/201 7 (A.Y S : 2013 - 14 & 2014 - 15 ) D.C.I.T, CIRCLE 9(2 )(1) R.NO. 665A, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 V. M/S. CAPITAL FIRST LTD., INDIABULLS FINANCE CENTRE, 15 TH FLOOR, TOWER 2, SENAPATI BAPAT MARG , ELPHINSTONE ROAD, MUMBAI 400 013 PAN: AACCK 6863 C (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BHAVIN MEHTA DEPARTMENT BY : SHRI ABI RAMA KARTIK E YAN DATE OF HEARING : 1 5 .11.2018 DATE OF PRONOUNCEMENT : 30 .01.2019 O R D E R PER C. N. PRASAD (JM) 1. THESE TWO APPEALS ARE FILED BY THE REVENUE AGAINST DIFFERENT ORDER S OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 16, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 02.05.2018 FOR THE A .YS. 2013 - 14 & 2014 - 15. 2 ITA NO. 5218 & 5219 /MUM/2017 M/S. CAPITAL FIRST LTD., 2. IN BOTH THESE APPEALS THE REVENUE CHALLENGED THE ORDER OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE MADE U/S. 14A R.W. RULE 8D OF THE I.T. RULES . 3. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN BOTH THE YEARS THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME AND THEREFORE, THERE IS NO JUSTIFICATION IN APPLYING THE PROVISIONS OF SECTION 14A R.W. RULE 8D OF I.T. RULES AND DISALLOWING THE EXPENSES ATTRIBUTABLE FOR EARNING EXEMPT INCOME. 4. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE LD. CIT(A) NOTICED TH AT THE ASSESSEE HAD NOT EARNED ANY EXEMPT INCOME DURING THE A .YS. 2013 - 14 & 2014 - 15 AND THEREFORE, NO DISALLOWANCE SHOULD BE MADE U/S. 14A R.W. RULE 8D OF I.T. RULES. FOLLOWING THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. MORGAN STANLEY INDIA SECURITIES LTD., IN ITA.NO. 114/MUM/2013 . AND THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEM I NVEST V. CIT IN ITA.NO. 749 OF 2014, THE LD. CIT(A) DELETED THE DISALLOWANCE MADE U/S. 14A R.W. RULES 8D OF I.T. RULES. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PR. CIT V. M/S. BALLARPUR INDUSTRIES LTD IN ITA.NO. 51 OF 2016 DATED 13.10.2016 HAD TAKEN A SIMILAR VIEW THAT WHEN 3 ITA NO. 5218 & 5219 /MUM/2017 M/S. CAPITAL FIRST LTD., THERE IS NO EXEMPT INCOME THERE SHOULD NOT BE ANY DISALLOWANCE U/S. 14A OF THE ACT. RESPECTFULLY FOLLOWING THE SAME , WE UPHOLD T HE ORDER OF THE LD.CIT(A) AND REJECT THE GROUNDS RAISED BY THE REVENUE. 6. IN THE RESULT, APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 30 TH JANUARY, 2019 SD/ - SD/ - ( G. MANJUNATHA ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 30 / 0 1/2019 GIRIDHAR , S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM