M/s. Pune Polymers Pvt.Ltd, Pune V. Assistant Commissioner of Income-tax, Circle - 10, Pune

ITA 791/PUN/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5638 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 02-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A

Judgement Text

आयकर अपीऱीय अधिकरण “ए” न्यायपीठ प ु णे म ें । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE (Through Virtual Court) BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपीऱ सं. / ITA No.791/PUN/2018 नििाारण वषा / Assessment Year : 2013-14 M/s. Pune Polymers Pvt. Ltd., J-71, MIDC, Bhosari, Pune – 411026 PAN : AABCP0076H ......अऩीऱाथी / Appellant बिाम / V/s. Asstt. Commissioner of Income Tax, Circle – 10, Pune ......प्रत्यथी / Respondent Assessee by : Shri M.K. Kulkarni Revenue by : Shri S.P. Walimbe स ु नवाई की तारीख / Date of Hearing : 20-12-2021 घोषणा की तारीख / Date of Pronouncement : 23-12-2021 आदेश / ORDER PER S.S. VISWANETHRA RAVI, JM : This appeal by the assessee against the order dated 19-01-2018 passed by the Commissioner of Income Tax (Appeals)-6, Pune [„CIT(A)‟] for assessment year 2013-14. 2 ITA No.791/PUN/2018, A.Y. 2013-14 2. The only issue is to be decided is as to whether the CIT(A) is justified in confirming the addition made by the AO on account of disallowance u/s. 14A r.w. Rule 8D(2) in the absence of earning of exempt income in the facts and circumstances of the case. 3. Heard both the parties and perused the material available on record. We note that the assessee is a company engaged in the business of manufacturing and selling of plastic moulded goods. According to the AO, the assessee made investment in shares of Rs.5,07,20,439/- and made no disallowance on account of expenditure. The contention of the assessee that when there is no exempt income earned and no disallowance is to be made, the AO did not accept the same and proceeded to disallow the expenditure under Rule 8D(2)(iii) being 0.5% of average value of investment as on 31-03-2013. Before the CIT(A), the same submission was made that there is no exempt income no disallowance is required but however, the CIT(A) confirmed the addition made by the AO on account of Rule 8D(2)(iii) of the Rules. Before us also the ld. AR reiterated the same submission as made before the AO and CIT(A) that when there is no exempt income the disallowance made by the AO and confirmed by the CIT(A) is liable to be deleted. We note that in Para No. 4.1 of the AO it was categorically contended and the same was recorded by the AO that there is no exempt income earned by the assessee. Likewise, the CIT(A) also recorded the same vide Para No. 5.1 of the impugned order. The ld. DR did not dispute the same. It is an established principle that when there is no exempt income the disallowance for the purpose of section 14A r.w. Rule 8D(2) is not warranted. Therefore, the order of CIT(A) in confirming the addition made by the AO on account of disallowance u/s. 14A r.w. Rule 8D(2)(iii) is 3 ITA No.791/PUN/2018, A.Y. 2013-14 not justified and it is deleted. Thus, the only ground raised by the assessee is allowed. 4. In the result, the appeal of assessee is allowed. Order pronounced in the open court on 23 rd December, 2021. Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) VICE PRESIDENT JUDICIAL MEMBER ऩ ु णे / Pune; ददनाांक / Dated : 23 rd December, 2021. रवव आदेश की प्रनिलऱपप अग्रेपषि / Copy of the Order forwarded to : 1. अऩीऱाथी / The Appellant. 2. प्रत्यथी / The Respondent. 3. The CIT(A)-6, Pune 4. The Pr. CIT-5, Pune 5. ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, “ए” बेंच, ऩ ु णे / DR, ITAT, “A” Bench, Pune. 6. गार्ड फ़ाइऱ / Guard File. //सत्यावऩत प्रतत// True Copy// आदेशान ु सार / BY ORDER, वररष्ठ तनजी सधचव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण ,ऩ ु णे / ITAT, Pune