DCIT 2(3)(1), MUMBAI V. TARIFF ADVISORY COMMITTEE GENERAL INSURANCE, MUMBAI

ITA 5342/MUM/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7552 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 16-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Keywords: Earning of tax free income; Revised return
• Section: 143(3); 14A

Judgement Text

, , , , INCOME-TAX APPELLATE TRIBUNAL EBENCH M UMBAI , , BEFORE S/SH. RAJENDRA,ACCOUNTANT M EMBER & PAWAN SINGH, JUDICIAL MEMBER ./I.T.A./5342/MUM/2015, /ASSESSMENT YEAR: 2011-12 DCIT-2(3)(1) ROOM NO.552, 5 TH FLOOR, AAYAKAR BHAVAN M.K. ROAD, MUMBAI-400 020. VS. M/S. TARIFF ADVISORY COMMITTEE GENERAL INSURANCE,1,2 FLOOR, ADORE HOUSE 6 K DUBHASH MARG, FORT MUMBAI-400 023. PAN:AABFT 9908 K ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI V. JUSTIN -DR ASSESSEE BY: NONE / DATE OF HEARING: 13/03/2018 / DATE OF PRONOUNCEMENT: 04/04/2018 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , - PER RAJENDRA, AM - CHALLENGING THE ORDER,DATED 21/08/2015 OF CIT(A)-6, MUMBAI,THE ASSESSING OFFICER(AO) HAS FILED THE PRESENT APPEAL.ASSESSEE,A REGULATORY AUTHORITY FOR INSURANCE,FILED ITS RETURN OF INCOME,ON 30/09/2011,DECLARING LOSS AT RS.18.96 CRO RES.THE AO COMPLETED ASSESSMENT U/S. 143(3) OF THE ACT,ON 28/02/2014,DETERMINING ITS INC OME AT RS.3.04 CRORES. 2. SOLITARY GROUND OF APPEAL IS ABOUT DELETING THE DIS ALLOWANCE MADE,U/S. 14A R.W.RULE 8D 2(I)OF THE INCOME TAX RULES,1962 (RULES).DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD DECLARED LOSS OF RS.18.96 CR ORES, THAT IT HAD FILED THE RETURN ON THE BASIS OF PROVISIONAL INCOME AND EXPENDITURE ACCOUNT,THAT THE ACCOUNTS OF THE ASSESSEE WERE AUDITED BY THE OFFICE OF THE INDIAN AUDIT AND ACCOUNTANT GE NERAL, THAT A REVISED RETURN WAS FILED DECLARING LOSS OF RS.5.879 CRORES, THAT THE ASSESSEE HAD CLAIMED EXEMPTION OF RS.9.13 CRORES U/S. 10(23BBE)OF THE ACT.AS PER THE AO,THE ENTIRE B USINESS INCOME OF THE ASSESSEE WAS EXEMPT.HE DIRECTED THE ASSESSEE TO EXPLAIN AS TO WH Y DISALLOWANCE SHOULD NOT BE MADE AS PER THE PROVISIONS OF SECTION 14A.AFTER CONSIDERING SUB MISSION OF THE ASSESSEE,THE AO MADE A DISALLOWANCE OF RS.8.83 CRORES INVOKING PROVISIONS OF SECTION 14A R.W.R. 8D OF THE RULES. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA)AND MADE SUBMISSIONS.AFTER CONSIDERING AVAILABLE MATERIAL,HE HELD 5342/M/15-M/S. TARIFF COMMITTEE GENERAL INSUARNCE 2 THAT THE ASSESSEE HAD NOT CLAIMED ANY INCOME AS EXE MPT FROM THE BUSINESS, THAT IN ABSENCE OF THE EXEMPTION CLAIMED THERE WAS NO JUSTIFICATION FO R ANY DISALLOWANCE. HE REFERRED TO THE CASE OF CORRTECH ENERGY PVT.LTD(45TAXMANN 116) LAKHANI M ARKEITNG INC.(49 TAXMANN 257) AND WINSOME TEXTILE INDUSTRIES (319ITR204) AND HELD THA T WHERE THE ASSESSEE DID NOT MAKE ANY CLAIM FOR EXEMPTION,SECTION 14A WOULD HAVE NO APPLI CATION,THAT FROM THE INCOME AND EXPEN - DITURE ACCOUNT,IT WAS CLEAR THAT THE ASSESSEE HAD O FFERED THE FEE COLLECTED FROM THE INSURERS (RS.9.13CRORES)AS ITS INCOME,THAT IT HAD NOT CLAIME D ANY EXEMPTION,WHILE COMPUTING THE INCOME.HE DIRECTED THE AO TO DELETE THE DISALLOWANC E. 4. DURING THE COURSE OF HEARING BEFORE US,THE DEPARTME NTAL REPRESENTATIVE (DR) STATED THAT THE ISSUE COULD BE DECIDED ON MERITS.AS STATED EARL IER, NONE APPEARED ON BEHALF OF THE ASSESSEE. WE FIND THAT THE FAA HAS GIVEN THE CATEGORICAL FIND ING OF FACT THAT ASSESSEE HAD NOT CLAIMED ANY EXEMPTION.AS PER THE SETTLED LAW,PROVISIONS OF SECTION 14A OF THE ACT R.W.R. 8D OF THE RULES CAN BE INVOKED ONLY IF AN ASSESSEE CLAIMS EXP ENDITURE AGAINST EXEMPT INCOME. IN OTHER WORDS,IF NO EXPENDITURE IS CLAIMED IN RESPECT OF EX EMPT INCOME NO DISALLOWANCE CAN BE MADE U/S. 14A.CONSIDERING THE FACTS OF THE CASE,WE ARE O F THE OPINION THAT ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL OR FACTUAL INFIRMITY. THE REFORE, CONFIRMING THE SAME, WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT, APPEAL FILED BY AO IS DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH APRIL, 2018. 04 ,2018 SD/- SD/- ( ( ( ( /PAWAN SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; /DATED : 04.04.2018. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.