DCIT (IT) 1(1)(2), MUMBAI V. ANTWERP DIAMOND BANK NV., MUMBAI

ITA 7482/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8026 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 22-02-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 15-12-2014
• Court: TRIBUNAL
• Department Lawyers: RAJGURU M V
• Assessee Lawyers: K K VED
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE IN COME TAX APPELLATE TRIBUNAL L , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ITA NO. 7481/ MUM/20 1 4 & 7482/MUM/2014 ( ASSESSMENT YEAR : 2010 - 11 & 2011 - 12 ) DCIT (IT) 1(1)(2), MUMBAI 400 038 VS. M/S. ANTWERP DIAMOND BA NK NV, 510, 5 TH FLOOR, TRADE CENTER, BKC, BANDRA (E), MUMBAI 400 051 PAN/GIR NO. AADCA2713J APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI RAJGURU MV ASSESSEE BY SHRI K K VED DATE OF HEARING 23 / 02 /201 7 DATE OF PRONOUNCEME NT 28 / 02 /201 7 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY REVENUE AGAINST THE ORDER OF CIT(A) - 10, MUMBAI DATED 30/09/2014 FOR THE A.Y.2010 - 11 AND 2011 - 12, IN THE MATTER OF ORDER PASSED U/S.143(3) R.W.S.144C OF THE IT ACT. 2. AT THE OUTSET, LEARNED AR PLACED ON RECORD THE ORDER OF THE TRIBUNAL FOR THE A.Y. 2003 - 04 TO 2009 - 10 IN ASSESSEES OWN CASE WHEREIN ALL THE ISSUES RAISED BY THE REVENUE ARE COVERED IN FAVOUR OF THE ASSESSEE. 3. WE HAD CAREFULLY GONE THROUGH THE ORD ER OF THE TRIBUNAL IN ASSESSEES OWN CASE WHEREIN ISSUE WITH REGARD TO DISALLOWANCE OF DATA PROCESSING COST U/S.40 (A)(I) HAS BEEN DEALT BY AO AT PAGE 04 - 14. THE DISALLOWANCE SO MADE HAS BEEN DELETED BY CIT(A) AFTER HAVING HIS OBSERVATION AT PAGE 2 - 10. WE F OUND THAT THE CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ITA NO. 7481/MUM/2014 & 7482/MUM/2014 M/S. ANTWERP DIAMOND BANK NV 2 ASSESSEE HAS RELIED ON THE ORDERS PASSED BY THE CIT(A) IN ASSESSEES OWN CASE FOR EARLIER YEARS VIZ., ASSESSMENT YEARS 2003 - 04, 2004 - 05, 2005 - 06 AND 2008 - 09. THE CIT(A) HAS ALSO RELIED UPON THE DECISION OF THE MUMBAI BENCH OF THE ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004 - 05. FURTHER SIMILAR VIEW HAS BEEN UPHELD BY THE MUMBAI BENCH OF THE ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2006 - 07, 2007 - 08 AND 2009 - 10, THUS DECI DING THE ISSUE IN ASSESSEES FAVOUR. 4. IN VIEW OF THE ABOVE FINDINGS OF CIT(A) AND RELYING ON THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF CIT(A) FOR DELETING DISALLOWANCE OF DATA PROCESSING C OST. 5. NEXT ISSUE PERTAINS TO TAXABILITY OF INTEREST PAID TO HEAD OFFICE. WE FOUND THAT THE CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS RELIED ON THE ORDER PASSED BY THE TRIBUNAL IN THE ASSESSEES OWN CAS E FOR THE ASSESSMENT YEAR 2003 - 04. FURTHER, SIMILAR VIEW HAS BEEN UPHELD BY THE MUMBAI BENCH OF THE ITAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2004 - 05, 2005 - 06, 2006 - 07, 2007 - 08 AND 2009 - 10, THUS DECIDING THE ISSUE IN ASSESSEES FAVOUR. WE DO NOT FIN D ANY INFIRMITY IN THE ORDER OF CIT(A). 6. NEXT ISSUE RELATES TO DISALLOWANCE U/S.14A FOR EARNING EXEMPT INCOME. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND FROM RECORD THAT THE ISSUE HAS BEEN DECIDED IN ASSESSEES FAVOUR BY THE MUMBAI ITAT, IN ASSESSEE S OWN CASE FOR ASSESSMENT YEARS 2004 - 05, 2005 - 06, 2007 - 08 AND 2009 - 10. THE INDIAN B RA NCH HAS NOT RECEIVED / EARNED ANY INTEREST ITA NO. 7481/MUM/2014 & 7482/MUM/2014 M/S. ANTWERP DIAMOND BANK NV 3 INCOME FROM ITS HEAD OFFICE OR OTHER FOREIGN BRANCHES AND HENCE THERE CAN BE NO QUESTION OF THE INTEREST EXPENS E IN QUESTION BE ING INCURRED TO EARN ANY EXEMPT INCOME AND HENCE THE SAME CANNOT BE DISALLOWED U/S.14A. THE PROPOSITION THAT NO DISALLOWANCE CAN BE MADE U/S.14A OF THE INCOME - TAX ACT,1961 IN CASE THERE IS NO EXEMPT INCOME IS NOW WELL SETTLED AND ONE CAN REFER TO THE FOLLO WING CASES WHEREIN THE SAID PROPOSITION HAS BEEN UPHELD: CIT V/S. DELITE ENTERPRISES (ITA NO.110 OF 2009) (BOM) CHEMINVEST LTD., V/S. CIT (2015) 378 ITR 33 (DELHI) ACIT VS. LAFARGE INDIA HOLDING (P) LTD., (2008) - (19 SOT 121) (MUM TRIB) CIT V/S.SHIVAM MOTOR S PVT. LTD., (2015) 230 TAXMAN 63 (ALLAHABAD) CIT V/S.CORRTECH ENERGY PVT. LTD., (233 TAXMAN 130) (GUJARAT) ACIT V/S. MR.M. BASKARAN (ITA NO.1717/MDS/2013) CIT V/S.LAKHANI MARKETING INC. (2015) 226 TAXM AN 45 (P & H) HUNTSMAN INTERNATIONAL (INDIA) P. LTD., V/S. DCIT (2016) 66 TAXMANN.COM 325 (MUM.TRIB) 6. CONTENTION OF ASSESSEE BEFORE US WAS THAT NO EXPENDITURE HAS BEEN INCURRED OR CLAIMED BY THE INDIAN BRANCH IN RESPECT OF INTEREST EARNED BY THE HEAD OFFICE (WHICH IS NOT TAXABLE). ACCORDINGLY, IT WAS PLEADE D THAT PROVISIONS OF SECTION 14A ARE NOT APPLICABLE TO THE SAID CASE. ITA NO. 7481/MUM/2014 & 7482/MUM/2014 M/S. ANTWERP DIAMOND BANK NV 4 7. WE FOUND SUBSTANTIAL MERIT IN THE CONTENTION OF LEARNED AR, HOWEVER, IN THE INTEREST OF JUSTICE, WE RESTORE THE MATTER BACK TO THE FILE OF THE AO TO FIND OUT IF ASSESSEE WAS IN RECEIP T OF ANY EXEMPT INCOME VIS - - VIS INTEREST PAID TO HEAD OFFICE. IF THE AO FOUND THAT ASSESSEE WAS NOT IN RECEIPT OF ANY EXEMPT INCOME, NO DISALLOWANCE IS TO BE MADE. ACCORDINGLY AO IS DIRECTED TO DECIDE AFRESH AFTER VERIFICATION. 8. LEARNED DR FAIRLY CONCED ED THAT SIMILAR GROUND S HA VE BEEN TAKEN BY REVENUE IN THE ASSESSMENT YEAR 2011 - 012. 9. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW FOLLOWING THE REASONING GIVEN IN THE ASSESSMENT YEAR 2010 - 11, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A ) FOR THE A.Y 2011 - 012 . 10. IN THE RESULT, APPEALS FILED BY THE REVENUE ARE DISMISSED IN TERMS INDICATED HEREINABOVE. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 28 / 02 /2017 S D/ - ( AMARJIT SINGH ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 28 / 02 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//