M/S GOYAL SALES PVT LTD, RAIPUR (CG) V. THE DY. COMMISSIONER OF INCOME TAX 1(2), RAIPUR (CG)

ITA 93/BIL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3233 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 25-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K BARAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 143(3); 14A; 250

Judgement Text

ITA NO.93/RPR/2016 A.Y. 2012-13 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER A ND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.93/RPR/2016 ASSESSMENT YEAR: 2012-13 M/S GOYAL SALES PVT. LTD., VS. THE DY. COMMISSIONE R OF INCOME GANDHI CHOWK, TAX 1(2), RAIPUR (C.G.). NEORA, RAIPUR (C.G.). [PAN AACG 8486 D] (APPELLANT) (RESPONDENT) APPELLANT BY : WRITTEN SUBMISSION RESPONDENT BY : SHRI R.K. BARAL, D.R. DATE OF HEARING : 11.08.2021 DATE OF PRONOUNCEMENT : 21.10.2021 O R D E R PER PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S)-I (CIT(A) IN SHORT), RAIPUR DATED 04.02.2016 ARISING OUT OF ORDER PASSED BY THE ASSESSING OFFICER (A.O.) UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT IN SHORT) DATED 13.11.2014 FOR THE ASSESSMENT YEAR (A.Y.) 2012-13. 2. AS PER THE GROUNDS OF APPEAL, THE ASSESSEE HAS C HALLENGED THE DISALLOWANCE OF RS.6,83,886/- BY THE A.O. TAKING THE SHELTER OF SEC TION 14A READ WITH RULE 8D OF THE INCOME TAX RULES, 1962 WHICH IS ALLEGED TO BE WRONG LY SUSTAINED BY THE CIT(A). 3. NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE T IME OF HEARING. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED U PON THE ORDERS OF THE LOWER AUTHORITIES. ITA NO.93/RPR/2016 A.Y. 2012-13 PAGE 2 OF 4 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. IT IS NOTICED THAT THE ASSESSEE HAS NOT DERIVED ANY EXEMPT INCOME DURING T HE YEAR WHICH FACT HAS BEEN REPORTED CONSISTENTLY BEFORE ALL AUTHORITIES. THE QUESTION THUS ARISE FOR DETERMINATION IS WHETHER SECTION 14A IS APPLICABLE WHEN THE ASSES SEE HAS NOT ACTUALLY RECEIVED ANY EXEMPT INCOME DURING THE YEAR FROM ASSETS CAPABLE O F YIELDING TAXABLE INCOME. IN THIS REGARD, WE TAKE NOTE OF THE CBDT CIRCULAR NO.5/2014 DATED 11.02.2014 WHICH SEEKS TO EMPHASIZE THAT ALL EXPENSES PERTAINING TO AN EXE MPT INCOME IS REQUIRED TO BE DISALLOWED NOTWITHSTANDING THE FACT THAT NO CORRESP ONDING TAX FREE INCOME HAS BEEN EARNED DURING THE FINANCIAL YEAR. HOWEVER, DESPITE THE CIRCULAR, VARIOUS COURTS HAVE HELD THAT SECTION 14A DISALLOWANCE COULD NOT BE KIC KED IN WHERE THERE WAS NO EXEMPT INCOME EARNED BY THE ASSESSEE. HONBLE DELHI HIGH COURT IN PCIT VS. IL&FS ENERGY DEVELOPMENT COMPANY LIMITED (2017) 84 TAXMANN. COM 186 (DELHI) AND THE HONBLE MADRAS HIGH COURT IN CIT VS. CHETTINAD LOGISTICS (P .) LIMITED (2017) 80 TAXMANN.COM 221 (MADRAS) (SLP DISMISSED IN CIT VS. CHETTINAD LO GISTICS (P.) LIMITED (2018) 95 TAXMANN.COM 250 (SC) HAVE EXPRESSED A CLEAR DISAGRE EMENT WITH CBDT CIRCULAR AND HELD THAT WHERE THERE IS NO EXEMPT INCOME IN RELEVA NT YEAR THERE CANNOT BE A DISALLOWANCE OF EXPENDITURE UNDER SECTION 14A OF TH E ACT. SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CORRTECH ENERGY (P.) LIMITED (2014) 45 TAXMANN.COM 116 (GUJ.) AND PR.CIT VS. INDIA GELATINE AND CHEMICALS LIMITED (2016) 66 TAXMANN.COM 356 (GUJ.). IN VIEW OF THE JUDICIAL FIAT AVAILABLE IN THIS REGARD, WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE CIT(A). THEREFORE, WE CONCUR WITH THE ACTION OF THE CIT(A) AND DECLINE TO INTERFERE. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED ON 21.10.2021 AS PER RULE 34(4) OF THE INCOME TAX APPELLATE TRIBUNAL RULES,1963. SD/- SD/- (PAWAN SINGH) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY PBN/* ITA NO.93/RPR/2016 A.Y. 2012-13 PAGE 3 OF 4 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER UE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR