M/s. Regent Automobiles Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 684/DEL/2014

• Counselvise Citation: 68420114 RSA 2014
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEEHAR RANJAN
• Assessee Lawyers: M P RASTOGI; R A BANSAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.684/DEL/2014 ASSESSMENT YEAR : 2009-10 REGENT AUTOMOBILES PVT. LTD., B-1/F-5, MOHAN COOP. INDL. AREA, MATHURA ROAD, NEW DELHI. PAN : AACCR5352H VS. DCIT, CIRCLE 15(1), NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M.P. RASTOGI, ADVOCATE & SHRI R.A. BANSAL, CA RESPONDENT BY: SHRI NEEHAR RANJAN PANDEY, ADDL.CIT DATE OF HEARING : 18.06.2015 DATE OF PRONOUNCEMENT : .06.2015 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 1.11.2013 IN RELATION TO THE ASSESSM ENT YEAR 2009-10. ITA NO.684/DEL/2014 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSING OFFICER (AO), DURING THE COURSE OF ASSESSMENT PROCEEDINGS, REQUIRED THE ASSESSEE TO FILE DETAILS WITH REFERENCE TO DISALLOW ANCE U/S 14A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) READ WITH RULE 8D. THE ASSESSEE CONTENDED BEFORE THE AO THAT IT H AD NOT MADE ANY INVESTMENTS TO EARN ANY EXEMPT INCOME NOR IT HAD EA RNED ANY SUCH INCOME DURING THE YEAR. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD SURPLUS FUNDS OF ITS OWN AND THE INVESTMENTS IN SEC URITIES WERE MADE OUT OF SUCH SURPLUS FUNDS. NOT CONVINCED, THE AO I NVOKED THE PROVISIONS OF SECTION 14A AND, ACCORDINGLY, MADE DI SALLOWANCE TO THE TUNE OF RS.45,46,631/-. THE LD. CIT(A) UPHELD THE IMPUGNED ORDER. THE ASSESSEE IS AGGRIEVED AGAINST THE ADDITION. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERVED FROM T HE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE AO THAT NO EXEMPT INCOME WAS EARNED DURING THE YEAR. THIS CONTENTION RAISED BY THE ASS ESSEE HAS NOT BEEN REBUTTED BY THE AO. DESPITE THAT, THE AO PROCEEDED TO COMPUTE DISALLOWANCE U/S 14A READ WITH RULE 8D. IN THE ABS ENCE OF ANY EXEMPT INCOME, THERE CAN BE NO DISALLOWANCE U/S 14A. THE H ONBLE ITA NO.684/DEL/2014 3 JURISDICTIONAL HIGH COURT IN CIT VS. HOLCIM INDIA PVT. LTD. (2014) 90 CCH 081 DEL-HC, HAS HELD THAT NO DISALLOWANCE U/S 14A CAN BE MADE IN THE ABSENCE OF ANY EXEMPT INCOME. IN JOINT INVESTMENTS PVT. LTD. VS. CIT (2015) 372 ITR 694 (DEL), IT HAS BEEN HELD THAT DISALLOWANCE U/S 14A CANNOT EXCEED THE EXEMPT INCOME. SINCE THE ASS ESSEE ADMITTEDLY DID NOT EARN ANY EXEMPT INCOME DURING THE RELEVANT YEAR, RESPECTFULLY FOLLOWING THE PRECEDENTS, I HOLD THAT NO DISALLOWAN CE U/S 14A CAN BE MADE. 4. IN THE RESULT, THE APPEAL IS ALLOWED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 1 9 TH JUNE, 2015. SD/- (R.S. SYAL) ACCOUNTANT MEMBER DATED:19 TH JUNE, 2015. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI