ARYADOOT TRANSPORT P. LTD, MUMBAI V. DCIT CEN CIR 6(4), MUMBAI

ITA 5548/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0583 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 01-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA LD
• Assessee Lawyers: HARSH SHAH LD AR
• Keywords: Earning of tax free income; Set aside
• Section: 14A

Judgement Text

1 ITA NO.5548/MUM/2018 ARYADOOT TRANSPOR P.LTD. ASSESSMENT YEAR-2010-11 - IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , SHAMIM YAHYA, ACCOUNTANT MEMBER ./ I.T.A. NO.5548/MUM/2018 ( ! '#! / ASSESSMENT YEAR:2010-11) ARYA DOOT TRANSPORT PVT.LTD. UNIT NO.801, GODREJ COLISEUM C-WING, OFF SOMAIYA HOSPITAL RD.,SION MUMBAI-400 022. / VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-6(4) MUMBAI. ./ ./ PAN/GIR NO. AAACA 4793 K ( / APPELLANT ) : ( ' # / RESPONDENT ) $ / APPELLANT BY : SHRI HARSH SHAH - LD. AR '#$ / RESPONDENT BY : SHRI CHAITANYA ANJARIA-LD. DR / DATE OF HEARING : 20/02/2020 / DATE OF PRONOUNCEMENT : 16/06/2020 / O R D E R SHAMIM YAHYA (ACCOUNTANT MEMBER):- 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED CIT APPEAL DATED 23/7/2018 AND PERTAINS TO ASSESSMENT Y EAR 2010 11. 2. THE ISSUE RAISED IS THAT LEARNED CIT APPEALS ERR ED IN SUSTAINING THE DISALLOWANCE OF RUPEES 3, 85, 313 UNDER SECTION 14 A DESPITE THE ASSESSEE NOT RECEIVING ANY EXEMPT INCOME DURING THE YEAR. 2 ITA NO.5548/MUM/2018 ARYADOOT TRANSPOR P.LTD. ASSESSMENT YEAR-2010-11 3. BRIEF FACTS OF THE CASE ARE THAT THE ABOVE SAID DISALLOWANCE BY THE ASSESSING OFFICER WAS SUSTAINED BY THE LEARNED CIT APPEALS DESPITE THE BOMBAY HIGH COURT DECISION IN THE CASE OF DELITE IN APPEAL NO. 110 OF 2009 DATED 26/2/2009 BEING CITED BEFORE HIM WHEREIN THE HONOURABLE JURISDICTIONAL HIGH COURT HAD AGREED WITH THE VIEW EXPRESSED BY THE HONOURABLE DELHI HIGH COURT THAT DISALLOWANCE UNDER SECTION 14A CANNOT EXCEED THE EXEMPT INCOME EARNED. FOR DOING SO THE L EARNED CIT APPEALS ERRONEOUSLY MENTIONS THAT HE IS RELYING UPON THE RE CENT DECISION OF HONOURABLE COURT IN THE CASE OF MAXOPP INVESTMENT L TD. WHILE DOING SO THE LEARNED CIT APPEALS REFERRED TO THAT PORTION WHERE THE HONOURABLE SUPREME COURT DEALS WITH THE ISSUE OF DOMINATE PURPOSE OF T HE INVESTMENT AND HOLD THAT STRATEGIC INVESTMENTS CANNOT BE A REASON TO NO T MAKE DISALLOWANCE UNDER SECTION 14 A. 4. I FIND THAT LEARNED CIT APPEALS HAS TOTALLY ERRE D IN THE ABOVE INTERPRETATION. THE HONOURABLE SUPREME COURT DID NO T HOLD THAT DISALLOWANCE HAS TO BE MADE UNDER SECTION 14 A EVEN WHEN NO EXEMPT INCOME IS EARNED. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE D ISALLOWANCE UNDER SECTION 14 A IS NOT WARRANTED AS IT IS NOT DISPUTED THAT ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME DURING THE YEAR. 3 ITA NO.5548/MUM/2018 ARYADOOT TRANSPOR P.LTD. ASSESSMENT YEAR-2010-11 6. ACCORDINGLY I SET ASIDE THE ORDERS OF AUTHORITIE S BELOW AND DIRECT THAT THE DISALLOWANCE SHOULD BE DELETED. 7. IN THE RESULT THIS APPEAL BY THE ASSESSEE STANDS ALLOWED ORDER PRONOUNCED ON 16/06/2020 UNDER RULE 34(4)OF I TAT RULES SD/- (SHAMIM YAHYA) AB / ACCOUNTANT MEMBER MUMBAI; A DATED : 16/06/2020 SR.PS:-JAISY VARGHESE BC D#C / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. '# / THE RESPONDENT 3. 4F ( ) / THE CIT(A) 4. 4F / CIT CONCERNED 5. E6GH'E8E5EI , EI , 4 / DR, ITAT, MUMBAI 6. HJKL / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.