SHRI Rajesh Agrawal, Indore V. THE ACIT 4(1), Indore

ITA 975/IND/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6518 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 23-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V J BORICHA
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

RAJESH AGRAWAL ITA 975/IND/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, HONBLE JUDICIAL MEM BER AND SHRI MANISH BORAD, HONBLE ACCOUNTANT ME MBER ITA NO. 975/IND/2016 A.Y. 2009-10 RAJESH AGRAWAL INDORE ::: APPELLANT VS ACIT 4(1) INDORE ::: RESPONDENT APPELLANT BY SHRI PANKAJ SHAH RESPONDENT BY SHRI V.J. BORICHA DATE OF HEARING 3.7.2018 DATE OF PRONOUNCEMENT 18 .7.2018 O R D E R PER SHRI MANISH BORAD, AM THIS APPEAL OF THE ASSESSEE RELATING TO THE ASSES SMENT YEARS 2009-10 IS DIRECTED AGAINST THE ORDER DATED 18.7.20 16 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, INDORE, WH ICH ARE ARISING OUT OF THE ORDER U/S 263/143(3) OF THE ACT FRAMED B Y ACIT, CIRCLE 4(1), INDORE. RAJESH AGRAWAL ITA 975/IND/2016 2 2. GROUND NO. 1 RELATES TO CONFIRMATION OF DISALLOW ANCE OF INTEREST EXPENDITURE AMOUNTING TO RS.1,64,350/- U/S 14A OF THE ACT. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THIS FACT IS NOT CONTROVERTED BY THE REVENUE THAT THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME DURING THE YEAR UNDER CONSIDERATION. WE FIND THAT AN IDENTICAL ISSUE HAD COME UP BEFORE THE HON'BLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LIMITED VS. CIT (2015) 16 TAXMAN.COM 118(DEL.) AND THE HON'BLE COURT DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE O BSERVING AS UNDER :- THE EXPRESSION DOES NOT FORM PART OF THE TOTAL IN COME IN SECTION 14A OF THE ACT ENVISAGES THAT THERE SHOULD BE AN ACTUAL RECEIPT OF INCOME, WHICH IS NOT INCLUDIBLE I N THE TOTAL INCOME, DURING THE RELEVANT PREVIOUS YEAR FOR THE P URPOSE OF DISALLOWING ANY EXPENDITURE INCURRED IN RELATION TO THE SAID INCOME. IN OTHER WORDS, SECTION 14A WILL NOT APPLY IF NO EXEMPT INCOME IS RECEIVED OR RECEIVABLE DURING THE RELEVANT PREVIOUS YEAR. RAJESH AGRAWAL ITA 975/IND/2016 3 3. WE, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF CHEMINVE ST LIMITED (SUPRA), HOLD THAT SINCE DURING THE YEAR, UNDER CON SIDERATION, NO EXEMPT INCOME HAS BEEN EARNED BY THE ASSESSEE, NO D ISALLOWANCE U/S 14A OF THE ACT WAS CALLED FOR. IN THIS VIEW OF THE MATTER, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND T HE GROUND OF APPEAL TAKEN BY THE ASSESSEE IS ALLOWED. 4. GROUND NO. 2 IS CONSEQUENTIAL IN NATURE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 18 TH JULY, 2018. SD/- SD/- (KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER 18 JULY , 2018 COPY TO : APPELLANT/RESPONDENT/CIT/CIT(A)/DR DN/-