DCIT Central Circle-31, New Delhi V. Bhilwara Energy Ltd., New Delhi

ITA 773/DEL/2020

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A)-33, New Delhi, which had allowed relief to Bhilwara Energy Ltd. on a suo moto disallowance made by the assessee under section 14A read with rule 8D of the Income Tax Rules, 1962. The assessee had initially declared a loss and made a disallowance of Rs. 9.9 crores, which included interest and other expenses. The main legal issue was whether the CIT(A) erred in allowing this relief. The Tribunal referenced several judgments and concluded that the disallowance should not exceed the exempt income, which was a mere Rs. 2,093.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131730 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-02-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 11-02-2020
• Other Referred Cases: Holcim India Pvt. Ltd. in ITA No. 486/2014 & 299/2014 (Del), Cheminvest Ltd. in ITA No. 749/2014 (Del), Joint Investment Pvt. Ltd Vs. CIT in ITA No. 117/2015 (Del)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHIBENCH ‘A’, NEW DELHI Before Sh. C. M. Garg, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 773/Del/2020 : Asstt. Year: 2014-15 DCIT, Central Circle-31, New Delhi Vs. Bhilwara Energy Ltd., 40-41, Bhilwara Bhawan, Community Centre, New Friends Colony, New Delhi-110025 (APPELLANT) (RESPONDENT) PAN No. AACCB9081B Assessee by : Sh. Akshat Jain, CA Revenue by : Sh. Kanv Bali, Sr. DR Date of Hearing: 08.02.2023 Date of Pronouncement: 14.02.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by Revenue against the order of the ld CIT(A)-33, New Delhi dated 16.09.2019. 2. The Revenue has raised the following grounds of appeal: “1. Whether on the facts and circumstances of the case, the ld CIT(A) has erred in law and on facts in allowing relief to the assessee on the suo moto disallowance made by the assessee u/s 14A read with rule 8D of the Income Tax rules, 1962 in his return of income filed on 25.11.2015.” 3. The assessee filed return of income declaring a loss of Rs.16.13 crores. The assessee company suo moto disallowance an amount of Rs. 9.9 crores consisting of interest of Rs. 9.5 crorees and other expenses of Rs. 40 lakhs on account of disallowance u/s 14A read with Rule 8D. Before the AO, the ITA No. 773/Del/2020 Bhilwara Energy Ltd 2 assessee pleaded that the amount has been wrongly disallowed suo moto and hence, remission be granted from the returned income. 4. The ld. CIT(A) after considering the following judgments:  Holcim India Pvt. Ltd. in ITA No. 486/2014 & 299/2014 (Del)  Cheminvest Ltd. in ITA No. 749/2014 (Del)  Joint Investment Pvt. Ltd Vs. CIT in ITA No. 117/2015 (Del) 5. The fact that the exempt income received by the assessee of Rs. 2,093(Rupees Two thousand and ninety three only) not been in dispute. The disallowance in any case cannot be more than the exempt income earned. The state cannot clutch the undue benefit of the mistake committed by the tax payer. Hence, we decline to interfere with the order of the ld CIT(A). 6. In the result, the appeal of the Revenue is dismissed. Order Pronounced in the Open Court on 14/02/2023. Sd/- Sd/- (C. M. Garg) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 14/02/2023 *Ajay Kumar Keot, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR