DCIT CC 5(3), MUMBAI V. SHREE KRISHNA SILK INDUSTRIES P. LTD, MUMBAI

ITA 6337/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0618 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 18-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 27-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B SATYANARAYANA RAJU
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.6337/MUM/2016 : ASST.YEAR 2012-2013 THE DY .COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 5(3) (ERSTWHILE DCIT CC-36) MUMBAI. / VS. M/S. SHREE KRISHNA SILK INDUSTRIES PRIVATE LIMITED 2 ND FLOOR, KAMAL INDUSTRIAL ESTATE VEER SAWARKAR MARG, PRABHADEVI MUMBAI 400 025. PAN : AAACS5165K. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI B.SATYANARAYANA RAJU /RESPONDENT BY : --- NONE --- / DATE OF HEARING : 18.05.2017 / DATE OF PRONOUNCEMENT : 05.06.2017 / O R D E R THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST ORDER OF LEARNED CIT(A) DATED 27.07.2016 AND PERTAINS TO ASSESSMENT YEAR 2012-2013. 2. GROUNDS OF APPEAL READ AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION U/S 14A OF THE INCOME-TAX ACT, 1961 BY IGNORING THE FACT THAT THE PROVISIONS OF SECTION 14A APPLY EVEN IF NO EXEMPT INCOME IS ACTUALLY EARNED OR RECEIVED DURING THE YEAR IN ANY FORM WHATSOEVER? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION U/S 14A OF THE INCOME-TAX ACT, 1961 BY IGNORING THE PROVISIONS OF CBDT CIRCULAR NO.5/2014 DATED 11.02.2014 WHEREBY IT HAS ITA NO.6337/MUM/2016. M/S.SHREE KRISHNA SILK INDUSTRIES PVT.LTD. 2 BEEN CLARIFIED THAT RULE 8D R.W.S. 14A PROVIDES FOR THE DISALLOWANCE OF EXPENDITURE EVEN WHERE THE ASSESSEE IN PARTICULAR HAS NOT EARNED EXEMPT INCOME? 3. I HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE. NONE APPEARED ON BEHALF OF THE ASSESSEE. HOWEVER, IN MY CONSIDERED OPINION THE ISSUE CAN BE DISPOSED OF BY HEARING THE LEARNED DR AND PERUSING THE RECORDS. 4. I FIND THAT IN THIS CASE DISALLOWANCE UNDER SECTION 14A HAS BEEN DONE. HOWEVER, IT WAS ASSESSEES PLEA THAT NO DISALLOWANCE CAN BE DONE AS ASSESSEE HAD NOT RECEIVED ANY EXEMPT INCOME DURING THE CONCERNED YEAR. LEARNED COMMISSIONER OF INCOME-TAX HAS ACCEPTED THIS SUBMISSION OF THE ASSESSEE. HE HAS PLACED RELIANCE UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF M/S.CHEMINVEST LIMITED IN ITA NO.749/MUM/2014 VIDE ORDER DATED 02.09.2015. IN THE SAID DECISION OF CHEMINVEST LIMITED, HONBLE DELHI HIGH COURT HAS REVERSED THE DECISION OF THE SPECIAL BENCH OF THE ITAT AND HELD THAT WHEN NO EXEMPT INCOME HAS BEEN EARNED, NO DISALLOWANCE U/S 14A CAN BE DONE. I FIND THAT NO CONTRARY DECISION OF THE JURISDICTIONAL HIGH COURT HAS BEEN PRODUCED BEFORE ME. IN SUCH CIRCUMSTANCES, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). ACCORDINGLY, I UPHOLD THE SAME. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED ON THIS 05 TH DAY OFJUNE, 2017. SD/- ( SHAMIM YAHYA ) / ACCOUNTANT MEMBER MUMBAI; DATED :05 TH JUNE, 2017. DEVDAS* ITA NO.6337/MUM/2016. M/S.SHREE KRISHNA SILK INDUSTRIES PVT.LTD. 3 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A)-53, MUMBAI 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE.