DCIT - 8(1)(1), MUMBAI V. RELIANCE INFRATEL LTD., NAVI MUMBAI

ITA 6467/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8311 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 04-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M V RAJGURU
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & SANDEEP GOSAIN (JM) I.T.A. NO. 6467 /MUM/20 1 6 (ASSESSMENT YEAR 20 12 - 13 ) I.T.A. NO. 6468/MUM/2016 (ASSESSMENT YEAR 2011 - 12) DCIT 8(1)(1) ROOM NO. 624 6 TH FLOOR AA YAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. VS. M/S. RELIANCE INFRATEL LTD. H BLOCK, 1 S T FLOOR DHIRUBHAI AMBANI KNOWLEDGE CITY THANE BELAPUR ROAD KOPARKHIRANE NAVI MUMBAI - 400 710. PAN : AACCR0181Q ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI JITEND RA SANGHAVI DEPARTMENT BY SHRI M.V. RAJGURU DATE OF HEARING 7 . 11. 201 7 DATE OF PRONOUNCEMENT 22 . 11 . 201 7 O R D E R PER B.R. BASKARAN (AM) : - BOTH THE APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LEARNED CIT(A) - 14, MUMBAI AND THEY RELATE TO A.YS. 2011 - 12 & 2012 - 13. THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER U/S. 14A OF THE ACT IN BOTH THE YEARS. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BUILDING AND OPERATING TELECOMMUNICATION TOWERS AND RELATE D ASSETS. THE ASSESSEE DID NOT MAKE ANY DISALLOWANCE U/S. 14A OF THE ACT WHILE COMPUTING TOTAL INCOME, EVEN THOUGH IT HELD INVESTMENTS TO THE TUNE OF ` 50007.50 LAKHS. THE ASSESSEE SUBMITTED THAT IT HAS RECEIVED MAJOR PORTION OF INVESTMENTS UNDER A S CHEME OF AMALGAMATION FROM OTHER COMPANIES AND REMAINING INVESTMENTS WERE BROUGHT FORWARD FROM EARLIER YEARS . ACCORDINGLY IT WAS SUBMITTED THAT THE RE WAS NO INVESTMENT ACTIVITIES DURING THESE TWO YEARS M/S. RELIANCE INFRATEL LTD. 2 UNDER CONSIDERATION. IT WAS ALSO SUBMITTED THAT IT DID NOT MAKE ANY FRESH INVESTMENT N OR IT RECEIVE D ANY DIVIDEND INCOME DURING THE YEARS UNDER CONSIDERATION . ACCORDINGLY, IT WAS SUBMITTED THAT NO DISA LLOWANCE IS CALLED FOR U/S. 14A OF THE ACT IN BOTH THE YEARS. 3. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE CONTENTION S OF THE ASSESSEE. ACCORDINGLY, HE MADE DISALLOWANCE UNDER RULE 8D(2)(III) OF THE ACT TO THE TUNE OF ` 250.03 LAKHS AND ` 250.01 LA KHS FOR A.YS. 2011 - 12 & 2012 - 13 RESPECTIVELY, WHICH WERE COMPUTED AT 0.5% OF AVERAGE VALUE OF INVESTMENT S . THE LEARNED CIT(A) DELETED THE SAME ON THE REASONING THAT THE DISALLOWANCE IS NOT REQUIRED TO BE MADE U/S. 14A OF THE ACT , IF THE ASSESSEE DID NOT EA RN ANY EXEMPT INCOME. THE LEARNED CIT(A) PLACED RELIANCE FOR THIS PROPOSITION ON THE DECISION RENDERED BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. HOLCIM INDIA PVT. LTD. (ITA NO. 486/2014 & ITA NO. 299/2014 DATED 5.9.2014). THE LEARNED CIT(A) ALSO PLACED RELIANCE ON THE DECISION RENDERED BY THE COORDINATE BENCH OF THE ITAT IN THE CASE OF KRISHNA K NITWEAR TECHNOLOGIES LTD. VS. DCIT (ITA NO. 2565/MUM/2012 DATED 15.2.2016), WHEREIN THE DECISION RENDERED BY HON'BLE DELHI HIGH COURT IN THE CASE OF CHEMI NVEST LTD. VS. CIT (378 ITR 33) WAS FOLLOWED. THE REVENUE IS AGGRIEVED BY THE DECISION S RENDERED BY THE LEARNED CIT(A) ON THIS ISSUE IN BOTH THE YEARS UNDER CONSIDERATION. 4. HAVING HEARD THE RIVAL SUBMISSION, WE ARE OF THE VIEW THAT THE ORDERS PASSED BY THE LEARNED CIT(A) DOES NOT CALL FOR ANY INTERFERENCE FOR THE REASONS THAT THE ASSESSEE DID NOT EARN ANY DIVIDEND INCOME DURING THE YEAR UNDER CONSIDERATION AND FURTHER ASSESSEE DID NOT CARRY ON ANY TYPE OF INVESTMENT ACTIVITY DURING THE YEARS UNDER CONS IDERATION. WE NOTICED THAT THAT THE LEARNED CIT(A) HAS FOLLOWED DECISION RENDERED BY HON'BLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD. (SUPRA) AND HOLCIM INDIA PVT. LTD. (SUPRA) IN COMING TO THE CONCLUSION THAT DISALLOWANCE U/S. 14A OF THE ACT IS NO T CALLED FOR WHEN THE ASSESSEE DID NOT RECEIVE ANY EXEMPT INCOME. ACCORDINGLY, WE FIND NO REASON TO INTERFERE WITH THE ORDERS PASSED BY THE LEARNED CIT(A) IN BOTH THE YEARS UNDER CONSIDERATION. M/S. RELIANCE INFRATEL LTD. 3 5. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER HAS BE E N PRONOUNCED IN THE COURT ON 22 . 11 .201 7. SD/ - SD/ - (SANDEEP GOSAIN ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 22 / 11 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI