Appeal details
Counselvise Citation
[2019] 117 COUNSELVISE.COM (IT) 1250 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 7 month(s) 15 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-06-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
F
Assessment Year
2013-2014
Appeal Filed On
19-10-2016
Judgement Text
IN THE INCOME-TAX APPELLATE TRIBUNAL, DELHI BENCH F, NEW DELHI BEFORE : SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 5430/DEL/2016 ASSESSMENT YEAR : 2013-14 PLANETCAST MEDIA SERVICES LTD., (FORMERLY KNOWN AS ESSEL SHYAM COMMUNICATION LTD.), 1121, HEMKUNT CHAMBERS, 11 TH FLOOR, 89, NEHRU PLACE, NEW DELHI. PAN- AAACF2299Q. (APPELLANT) VS. A CIT CENTRAL CIRCLE -26 NEW DELHI. (RESPONDENT) APPELLANT BY SH. VED JAIN, ADVOCATE RESPONDENT BY SH. SURENDER PAL, SR. DR ORDER PER B.R.R. KUMAR, A.M.: THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING SATELLITE BASED TELECOMMUNICA TION SOLUTIONS LIKE VSAT SERVICES AND BROADBAND SERVICES. DURING THE YEAR, T HE ASSESSEE HAS EARNED EXEMPT INCOME OF RS.24,66,531/- FROM THE INVESTMENT IN IRFC BONDS OF RS.3,04,51,000/-. THE TOTAL INVESTMENT AS PER THE B ALANCE SHEET AS ON 31.03.2013 WERE TO THE TUNE OF RS.13,89,94,676/-. DATE OF HEARING 04.06.2019 DATE OF PRONOUNCEMENT 04 .06.2019 ITA NO. 5330/DEL/2016 2 2. THE ISSUE TO BE ADJUDICATED IS, WHETHER ENTIRE INVESTMENTS OR ONLY THE EXEMPT INCOME YIELDING INVESTMENTS ARE TO BE CONSID ERED WHILE DISALLOWING THE EXPENDITURE U/S. 14A READ WITH RULE 8D(2)(III)? . 3. SECTION 14A OF THE ACT PROVIDES - FOR THE PURPOS ES OF COMPUTING THE TOTAL INCOME UNDER THIS CHAPTER, NO DEDUCTION SHALL BE AL LOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. HENCE, WHAT SECTION 14A PROVIDES IS THAT IF THERE IS ANY INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT, THE EXPENDITURE WHICH IS INCURRED FO R EARNING SUCH INCOME IS NOT AN ALLOWABLE DEDUCTION. THE COROLLARY OF THIS A NALYSIS IS THAT, WHEN CERTAIN INVESTMENTS DO NOT YIELD DIVIDEND OR EXEMPT INCOME, NO EXPENDITURE CAN BE DISALLOWED. RELIANCE IS PLACED IN THIS REGARD ON TH E JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF INTERGLOBE ENTERPRISES LT D., ITA NO. 456/2016 DATED 19.08.2016, WHEREIN IT IS HELD THAT ONLY THE INVEST MENTS EXPRESSLY SPELT OUT IN RULE 8D(III) WHICH IS TO BE RECKONED FOR THE PURPOS E OF CALCULATION OF AVERAGE OF HALF PERCENT. SIMILAR VIEW HAS BEEN TAKEN BY DEL HI TRIBUNAL IN THE CASE OF VIREET INVESTMENT P. LTD., ITA NO. 502/DEL/2012 AND ALSO IN THE CASE OF M/S. APOLLO FINANCE LTD., ITA NO. 339/DEL/2015 DATED 31. 01.2018. HENCE, WE HOLD THAT ONLY THE INVESTMENTS WHICH YIELDED THE EXEMPT INCOME ARE TO BE ITA NO. 5330/DEL/2016 3 CONSIDERED WHILE DETERMINING THE DISALLOWANCE U/R. 8D(2)(III). THE MATTER IS REFERRED BACK TO THE FILE OF THE ASSESSING OFFICER FOR THE LIMITED PURPOSE OF COMPUTATION OF DISALLOWANCE TAKING INTO CONSIDERATI ON THE PRINCIPLES LAID DOWN ABOVE. 3. AS A RESULT, THE APPEAL IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/06/2019. SD/- SD/- (H.S. SIDHU) (B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 04 JUNE, 2019 *AKS* COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES, NEW DELHI
