ITO, New Delhi V. M/s. Athena Energy Ventures P.Ltd., New Delhi

ITA 5656/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4721 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 03-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N
• Keywords: Earning of tax free income; Capital Gains
• Section: 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI A BEN CH, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER, AND SHRI N.K. BILLAIYA ACCOUNTANT MEMBER ITA NO. 5656/DEL/2016 [A.Y 2012-13] THE I.T.O VS. M/S ATHENA ENERGY VENTURES [P] LTD WARD 3(4) J 38, 2 ND FLOOR, B.K. DUTT, COLONY NEW DELHI JOR BAGH LANE, NEW DELHI PAN : AAGCA 2179 K [APPELLANT] [RESPONDENT] DATE OF HEARING : 24.02.2020 DATE OF PRONOUNCEMENT : 25.02.2020 ASSESSEE BY : NONE REVENUE BY : SHRI S.N. PANDEY, S R. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE CIT(A) - 1, NEW DELHI DATED 01.08.2018 PERTAINING TO A.Y 2012-13. 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT TH E CIT(A) ERRED IN DELETING THE ADDITION OF RS. 3,55,46,083/- MADE BY THE ASSESSING 2 OFFICER U/S 14A OF THE INCOME-TAX ACT, 1961 [HEREIN AFTER REFERRED TO AS 'THE ACT'] 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT D URING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFI CER NOTICED THAT THE ASSESSEE HAS MADE INVESTMENT IN SHARES AMOUNTING TO RS. 789.02 LAKHS. THE ASSESSING OFFICER WAS OF THE FIRM BELIEF THAT S UCH INVESTMENTS HAVE BEEN MADE FOR THE PURPOSE OF EARNING EXEMPT INCOME AND LONG TERM CAPITAL GAINS WHICH ARE EXEMPT AND NOT TAXABLE TO T AX. INVOKING THE PROVISIONS OF SECTION 14A OF THE ACT R.W.R 8D OF TH E RULES, THE ASSESSING OFFICER COMPUTED THE DISALLOWANCE AT RS. 3,55,46,8,083/-. 4. THE ASSESSEE CHALLENGED THE ADDITION BEFORE THE LD. CIT(A) AND VEHEMENTLY CONTENDED THAT DURING THE YEAR, THE ASSE SSEE HAS NOT EARNED ANY EXEMPT INCOME. THEREFORE, NO DISALLOWAN CE NEED BE MADE U/S 14A OF THE ACT. 5. THE LD. CIT(A) WAS CONVINCED WITH THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME, THEREFORE, NO DISALLOWANCE NEED BE MADE U/S 14A OF THE ACT. 3 6. BEFORE US, THE LD. DR STRONGLY SUPPORTED THE FIN DINGS OF THE ASSESSING OFFICER. 7. NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREFO RE, WE DECIDED TO PROCEED EX-PARTE. 8. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE OR DERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT DURING THE YEAR THE ASSESSEE DID NOT EARN ANY EXEMPT INCOME FROM TAX. WE FIND THAT THE ASSESSEE HAS POINTED OUT TO THE LD. CIT(A) THAT NO EXEMPT INCOME IS EARNED DURING THE YEAR UNDER CONSIDERATION. SINCE THERE IS NO EXEMPT INCOME EARNED DURING THE YEAR UNDER CONSIDERATION, NO DISALLOWANCE IS TO BE MADE U/S 14A R.W.R 8D OF THE ACT. THIS ISSUE IS BY NOW WELL SETTLED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF M/S CHEMINVEST LTD 121 ITD 318 WHICH WAS REVERSED BY TH E HON'BLE HIGH COURT OF DELH 61 TAXMAN.COM 118. SAME VIEW IS TAKE N BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CORRTECH ENERGY (P) LTD 372 ITR 97. IN VIEW OF THE ABOVE, DISALLOWANCE OF RS. 3,55,46,0 83/- IS DIRECTED TO BE DELETED. GROUND RAISED BY THE REVENUE IS DISMISS ED. 4 9. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 5656/DEL/2016 IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 25.02. 2020. SD/- SD/- [H.S. SIDHU] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25 TH FEBRUARY, 2020. VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI 5 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS /PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P S/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER