Creamline Dairy Projects Limited, Hyderabad V. Dy. Commissioner of Income Tax , Circle-1(2), Hyderabad

ITA 937/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 5381 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2014-2015
• Appeal Filed On: 11-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 937 /HYD/2018 ASSESSMENT YEAR: 201 4 - 15 CREAMLINE DAIRY PROJECTS LIMITED, HYDERABAD [PAN: AABCC6780D ] VS THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE - 1( 2 ), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.C.DEVDAS, A R FOR REVENUE : SHRI ROHIT MUJUMDAR, DR DATE OF HEARING : 09 - 02 - 2021 DATE OF PRONOUNCEMENT : 06 - 0 5 - 2021 O R D E R PER S.S. GODARAA, JM : THIS ASSESSEES APPEAL FOR AY.201 4 - 15 ARISES FROM THE CIT(A) - 1, HYDERABADS ORDER DATED 1 8 - 12 - 2017 PASSED IN CASE NO.0 227 /CIT(A) - 1/HYD/2016 - 17/201 7 - 18 , IN PROCEEDINGS U/S.143(3) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL: 2. THE L D.CIT(A) OUGHT TO HAVE OBSERVED THAT THE ASSE SSING OFFICER ERRED IN ARRIVING AT THE CONCLUSION THAT THE EXPENDITURE INCURRED WOULD COME INTO THE AMBIT OF PROVISIONS OF SECTION 14A OF THE I.T.ACT. ITA NO. 937 /HYD/2018 : - 2 - : 3. THE L D.CIT(A) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE THERE WAS NO SCOPE FOR APPLYING PROVISIONS OF SECTION 14A AND DISALLOW EXPENDITURE OF RS.14,90,000/ - 4. THE LD.CIT(A) OUGHT TO HAVE OBSERVED THAT THE ASSESSING OFFICER ERRED IN WORKING OUT T HE DISALLOWANCE AT RS.14,90,000/ - BY INVOKING PROVISIONS OF SECTION 14A AND THEREFORE, THE SAME LIABLE TO BE DELETED. 3. AT THE OUTSET, LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THERE IS NO DIVIDEND INCOME EARNED IN THE RELEVANT PREVIOUS YEAR. I N THIS CONNECTION, HE RELIED ON THE FOLLOWING CASE LAW: I. CIT VS. CHETTINAD LOGISTICS PVT. LTD., [80 TAXMANN.COM 221] (MADRAS); II. CIT VS. CORRTECH ENERGY PVT. LTD., [223 TAXMAN 130] (GUJ); III. CHEMINVEST LTD., VS. CIT (2015) [378 ITR 33] (DEL) THEIR LORDSHIPS HOLD THAT SECTION 14A READ WITH RULE 8D APPLIES ONLY IN RELATION TO AN ASSESSEES EXEMPT INCOME AND NOT OTHERWISE. WE THEREFORE DELETE THE IMPUGNED DISALLOWANCE. 4. THIS ASSESSEES APPEAL IS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 06 TH MAY, 2021 SD/ - SD/ - (LAXMI PRASAD SAHU) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 06 - 0 5 - 2021 ITA NO. 937 /HYD/2018 : - 3 - : *GMV COPY TO : 1. CREAMLINE DAIRY PROJECTS LIMITED, C/O B.NARSING RAO & CO., C HARTERED ACCOUNTANTS, PLOT NO.554, ROAD NO.92, JUBILEE HILLS, HYDERABAD . 500 096 2.THE DY.COMMISSIONER OF INCOME TAX, CIRCLE - 1(1), HYDERABAD. 3.CIT(APPEALS) - 1, HYDERABAD. 4.PR.CIT - 1, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.