Jt. Commissioner of Income Tax (OSD), Range-1, Hyderabad V. Aamoda Publications Private Limited , Hyderabad

ITA 680/Hyd/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0956 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 14-08-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 12-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T MADAN
• Assessee Lawyers: A V RAGHURAM
• Keywords: Business income; Earning of tax free income; Rule 8D
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 680/HYD/2018 ASSESSMENT YEAR : 2014 - 15 JCIT (OSD), RANGE - 1, HYDERABAD. VS. M/S. AAMODA PUBLICATIONS PRIVATE LIMITED, PLOT NO.76, ANDHRA JYOTHI BUILDING, ASHWINI ENCLAVE, HUDA HEIGHTS, ROAD NO.70, JUBILEE HILLS, HYDERABAD 500 033. PAN: AADCA 7212 Q (APPELLANT) (RESPONDENT) ASSESSEE BY: SR I A.V. RAGHURAM REVENUE BY: S RI T. MADAN, DR DATE OF HEARING: 14/08 /2019 DATE OF PRONOUNCEMENT: 05 /0 9 /2019 ORDER PER SMT. P. MADHAVI DEVI, J.M: THIS IS REVENUES APPEAL FOR THE ASST. YEAR 2014 - 15 AGAINST THE ORDER OF THE LD. CIT(A) - 1, HYDERABAD DATED 21/12/2017. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE - COMPANY FILED ITS RETURN OF INCOME FOR THE A.Y. 2014 - 15 ON 26/09/2014 DECLARING A BUSINESS INCOME OF RS. 4,28,90,610/ - AFTER SET - OFF OF EARLIER YEARS LOSSES OF RS. 4,42,81,985/ - UNDER NORM AL PROVISIONS AND RS. 4,09,21,236/ - 2 UNDER MAT PROVISIONS OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 143(3) OF THE ACT, THE A.O OBSERVED THAT THE ASSESSEE - COMPANY HAS MADE INVESTMENT TO THE TUNE OF RS. 41,07,32,230/ - BUT HAS NOT ADDED BACK ANY EXPENDITURE WHICH IS RELATABLE TO EXEMPT INCOME WHICH MIGHT HAVE BEEN EARNED F ROM SUCH INVESTMENT. THE ASSESSEE WAS THEREFORE ASKED TO EXPLAIN AND THE ASSESSEE EXPLAINED THAT NO EXEMPT INCOME IS DEBITED WHILE COM PUTING THE TAXABLE INCOME AND THEREFORE DISALLOWANCE U/S. 14A IS NOT WARRANTED. THE ASSESSING OFFICER HOWEVER WAS NOT CONVINCED WITH THE ASSESSEES CONTENTIONS AND HELD THAT FOR INVOKING THE PROVISIONS OF SECTION 14A, IT IS NOT MATERIAL THAT THE ASSESSEE SHOULD HAVE EARNED SUCH EXEMPT INCOME DURING THE FINANCIAL YEAR UNDER CONSIDERATION AND APPLIED RULE 8D AND CALCULATED THE DISALLOWANCE U/S. 14A AT RS. 91,58,539/ - AND BROUGHT IT TO TAX. 3. AGGRIEVED, ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A), WHO GR ANTED RELIEF TO THE ASSESSEE BY HOLDING THAT THE DISALLOWANCE U/S. 14A IS NOT CALLED FOR WHEN THERE IS NO EXEMPT INCOME EARNED BY THE ASSESSEE DURING THE RELEVANT ASSESSMENT YEAR. THE LD. CIT(A) RELIED UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD VS. CIT (234 TAXMANN 761). AGAINST THE RELIEF GRANTED BY THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 3 4. THE LD. DR RELIED UPON THE ORDER OF THE A.O. AS WELL AS THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE LD. CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE LD. CIT(A) HAS FOLLOWED THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD (SUPRA) TO GRANT RELIEF TO THE ASSESSEE AND THE LD. DR HAS NOT FILED ANY DECISION TO THE CONTRARY. IN VIEW OF THE SAME, THE APPEAL OF THE REVENUE IS DISMISSED. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH SEPTEMBER , 2019. SD/ - SD/ - (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 05/09 / 2019 OKK COPY TO: - 1) M/S. AAMODA PUBLICATIONS PVT LTD, PLOT NO.76, ANDHRA JYOTHI BUILDING, ASHWINI ENCLAVE, HUDA HEIGHTS, ROAD NO.70, JUBILEE HILLS, HYDERABAD 500 033. 2) JCIT (OSD), RANGE - 1, 8 TH FLOOR, C - BLOCK, R.NO.836, IT TOWERS, HYDERABAD 500 004. 3) THE CIT(A) - 1, HYDERABAD 4) THE PR. CIT - 1, HYDERABAD 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE