ADVANCE INVESTMENT MEECHANICS INDIA PVT. LTD, MUMBAI V. INCOME TAX OFFICER-WD 12(1) (1) , MUMBAI

ITA 798/MUM/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0029 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Next Hearing Date: 24-07-2022
• Assessment Year: 2016-2017
• Appeal Filed On: 26-04-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 143(3); 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, MUMBAI SHRI M. BALAGANESH, ACCOUNTANT MEMBER SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 798/MUM/2022 (Assessment Year: 2016-17) Advance Investment Mechanics India Pvt. Ltd. 1501, L-Wing, Bhomi Breeze Building, Kulup Wadi, Borivali (East), Mumbai - 400066 [PAN:AAECA1218K] Income Tax Officer, Ward 12(1)(1), Mumbai, Aaykar Bhavan, Mumbai - 400020 .................. Vs ................ Appellant Respondent Appearances For the Appellant/Assessee For the Respondent/Department : : Shri Haridas Bhat Shri Rajiv Singh Date of conclusion of hearing Date of pronouncement of order : : 25.07.2022 20.10.2022 O R D E R Per Rahul Chaudhary, Judicial Member: 1. By way of the present appeal the Appellant has challenged the order, dated 22.03.2022, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as „the CIT(A)‟] for the Assessment Year 2016-17, whereby the Ld. CIT(A) had dismissed the appeal filed by the Appellant against the Assessment Order, dated 26.10.2018 passed under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟). 2. When the matter was taken up for hearing, the Ld. Authorised Representative for the Appellant submitted all the grounds raised in the present appeal pertain to disallowance of INR ITA. No. 798/Mum/2022 Assessment Year: 2016-17 2 32,78,849/- made by the Assessing Officer by invoking the provisions of Section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962. Though various grounds of appeal have been raised in the appeal, the Ld. Authorised Representative for the Appellant pressed into service „Without Prejudice‟ contention raised as Ground II in the appeal which read as under: “Ground II Without prejudice to the above, the Appellant prays that the disallowance should be restricted the extent of exempt income earned during the year of Rs. 4,635 only.” 3. Learned Authorised Representative for the Appellant submitted that during the relevant assessment year, the Appellant had earned exempt income of INR 4,635/- only and therefore, in case the addition made under Section 14A of the Act are restricted to the aforesaid exempt income, the grievance of the Appellant shall stand redressed. In support of his contention, he relied upon the judgment of the Hon‟ble Supreme Court in the case of DCIT Vs. State Bank of Patiala: [2018] 259 Taxman 314 (SC)[08-10-2018]. 4. We find merit in the contention advanced by the Learned Authorised Representative for Appellant. The Hon‟ble Supreme Court has, in the case of State Bank of Patiala (supra), held that disallowance under Section 14A of the Act cannot exceed the exempt income earned by the Appellant during the relevant previous year. To the same effect is the judgment of the Hon‟ble Bombay High Court in the case of Nirved Traders (P.) Ltd. vs. Dy. CIT [IT Appeal No. 149 of 2017, dated 23.4.2019. It is admitted position that the Appellant had earned exempt ITA. No. 798/Mum/2022 Assessment Year: 2016-17 3 dividend income of INR 4,635/- only during the relevant previous year and therefore, the amount of disallowance under Section 14A of the Act cannot exceed the same in view of the judgment of the Hon‟ble Supreme Court and the Hon‟ble Bombay High Court. 5. In view of the above, Ground No. II raised by the Appellant is allowed whereas Ground No. I (1,2 and 3) are disposed off as not pressed in view of the submissions advanced by the Learned Authorised Representative for the Appellant recorded and our findings with regard to Ground No. II hereinabove. 6. In the result, the present appeal is partly allowed. Order pronounced on 20.10.2022. Sd/- Sd/- (M. Balaganesh) Accountant Member (Rahul Chaudhary) Judicial Member म ुंबई Mumbai; दिन ुंक Dated : 20.10.2022 Alindra, PS ITA. No. 798/Mum/2022 Assessment Year: 2016-17 4 आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपील र्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आय क्त(अपील) / The CIT(A)- 4. आयकर आय क्त / CIT 5. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, म ुंबई / DR, ITAT, Mumbai 6. ग र्ड फ ईल / Guard file. आिेश न स र/ BY ORDER, सत्य दपि प्रदि //True Copy// उप/सह यक पुंजीक र /(Dy./Asstt. Registrar) आयकर अपीलीय अदिकरण, म ुंबई / ITAT, Mumbai