DCIT, New Delhi V. M/s. ASF Infrastructure Pvt. Ltd., New Delhi

ITA 93/DEL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7175 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 05-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHISH GOEAL
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI A BEN CH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO. 93/DEL/2017 [ASSESSMENT YEAR: 2013-14] DCIT, CIRCLE-3(2), R.NO.380B, C.R. BUILDING, I.P. ESTATE, NEW DELHI M/S ASF INFRASTRUCTURE PVT. LTD. 11, BABAR LANE, BENGALI MARKET, NEW DELHI-110001 PAN - AAFCA4680G APPELLANT RESPONDENT APPELLANT BY NONE RESPONDENT BY SHRI ASHISH GOEAL DATE OF HEARING 29 /07/2019 DATE OF PRONOUNCEMENT 29 /07/2019 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE CIT(A)-1, NEW DELHI, DATED 14/10/2016 PERTAINING TO AY 2013-14. 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT TH E LD. CIT(A) ERRED IN DELETING THE ADDITIONS OF RS.93,97,635/- MADE BY THE ASSESSING O FFICER ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE U/S14A READ WITH RULE-8D. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF SUBLETTING THE PROPERTIES AND SHOWING OTHER HIGHER INCOME. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS, THE AO NOTICED THAT THE ASSESSEE HAS MADE INVESTMENT OF RS.7.47 CRORES INTO EQUITY OF THE SUBSIDIARY COMPANIES 2 ITA NO.93/DEL/2017 AND ASSOCIATES. THE AO FOUND THAT THE ASSESSEE HAS NOT DISALLOWED ANY EXPENDITURE IN RELATION TO KEEPING THE INVESTMENT IN EQUITY. INVOK ING PROVISIONS OF SECTION 14A R.W.R. 8D, THE AO COMPUTED THE DISALLOWANCE OF RS.93,97,635/-. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) AND STRONGLY OBJECTED THE DISALLOWANCE CLAIMING THAT DURING THE YEAR THE ASSE SSEE HAS NOT EARNED ANY EXEMPT INCOME AND THEREFORE THE RATIO LAID DOWN BY THE HONBLE HI GH COURT OF DELHI IN THE CASE OF CHEMINVEST LTD. 61 TAXMANN.COM 118 SQUARELY APPLY. 6. CONSIDERING THE FACTS OF NIL EXEMPT INCOME, THE LD. CIT(A) DELETED THE DISALLOWANCE. 7. THIS ISSUE IS NOW WELL SETTLED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CHEM INVEST (SUPRA) WHEREIN THE HONBLE HIGH COURT HAS HELD THAT THERE SHOULD BE ACTUAL RECEIPT OF INCOME AND WHICH IS NOT INCLUDABLE IN TOTAL INCOME, HENCE, SECTION 14A WILL NOT APPLY, WH ERE NO EXEMPT INCOME IS RECEIVED OR RECEIVABLE DURING THE RELEVANT ASSESSMENT YEAR. SIM ILAR VIEW WAS TAKEN BY THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS CORRTECH ENE RGY PVT. LTD. [2014] 45 TAXMAN.COM 116 (GUJARAT). RESPECTFULLY FOLLOWING THE DECISIONS OF THE HONBLE HIGH COURTS, WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS AC CORDINGLY DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29/07/ 2019 SD/- SD/- [SUCHITRA KAMBLE] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DELHI; DATED: 29/07/2019. F{X~ F{X~ F{X~ F{X~{T? {T?{T? {T? FA FA FA FA P.S P.SP.S P.S 3 ITA NO.93/DEL/2017 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI