Avinash Bhosale Infrastructure Pvt. Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 986/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0728 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-07-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 12-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Earning of tax free income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E . , , ! ' , # $ BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NOS. 985 & 986/PUN/2016 #& ' (' / ASSESSMENT YEARS : 2009-10 & 2012-13 AVINASH BHOSALE INFRASTRUCTURE PVT. LTD., 2, ABIL HOUSE, GANESH KHIND ROAD, RANGE HILL CORNER, PUNE-411 007 PAN : AABCA5452C .... / APPELLANT & / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), PUNE. / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI PANKAJ GARG / DATE OF HEARING : 11.09.2018 / DATE OF PRONOUNCEMENT : 29.11.2018 ) / ORDER PER VIKAS AWASTHY, JM THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAINS T THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, PUNE FOR THE ASSES SMENT YEARS 2009-10 & 2012-13, RESPECTIVELY. BOTH THE IMPUGNED ORDE RS ARE OF EVEN DATE I.E. 01.02.2016. 2 ITA NOS.985 & 986/PUN/2016 A.YS.2009-10 & 2012-13 2. SINCE THE ISSUE RAISED IN BOTH THE APPEALS IS IDENTICAL I.E. DISALLOWANCE U/S.14A R.W.R 8D, THESE APPEALS ARE TAKEN UP TOGETHER FO R ADJUDICATION AND ARE DISPOSED OF VIDE THIS COMMON ORDER. 3. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND IS ENGAGE D IN THE BUSINESS OF BUILDING, OPERATING INFRASTRUCTURE FACILITIES ETC. IN ASSESSMENT YEAR 2009-10, THE ASSESSING OFFICER VIDE ORDER DATED 06.02.2015 PASSED U /S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) MADE DISALLOWANCE OF RS.5,12,810/- U/S.14A R.W.R.8D. THE LD. AR SUBMIT TED THAT DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDE R APPEAL, THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME. THE LD. AR C ONTENDED THAT WHERE NO EXEMPT INCOME HAS BEEN EARNED BY THE ASSESS EE, NO DISALLOWANCE U/S.14A R.W.R. 8D IS WARRANTED. 3.1 THE LD. AR FURTHER SUBMITTED THAT IN ASSESSMENT YEAR 2012-13 AS WELL, THE ASSESSING OFFICER MADE DISALLOWANCE OF RS.52,14,723/- U/S.14A R.W.R.8D. THE ASSESSEE IN THE PERIOD RELEVANT TO ASSESSME NT YEAR 2012-13 ALSO HAS NOT EARNED ANY EXEMPT INCOME, THEREFORE, NO DISA LLOWANCE U/S.14A R.W.R.8D IS WARRANTED. 4. ON THE OTHER HAND, SHRI PANKAJ GARG REPRESENTING TH E DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBM ITTED THAT DISALLOWANCE UNDER RULE 8D IS MANDATORY WHERE THE ASSESS EE HAS MADE INVESTMENT IRRESPECTIVE OF THE FACT WHETHER THE ASSESSEE HAS EARNED DIVIDEND INCOME FROM THE INVESTMENT OR NOT. THE LD. DR PLACED RELIANC E ON THE CBDT CIRCULAR NO.5/2014 DATED 11.02.2014 AND THE DECISION OF AMR ITSAR BENCH OF 3 ITA NOS.985 & 986/PUN/2016 A.YS.2009-10 & 2012-13 THE TRIBUNAL IN THE CASE OF LALLY MOTORS INDIA (P) LTD. VS. P R. COMMISSIONER OF INCOME TAX REPORTED AS 170 ITD 370. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIV ES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. THE S OLITARY ISSUE RAISED IN BOTH THE APPEALS IS WITH RESPECT TO DISALLOWANCES MADE U/S.14A R.W.R.8D AS UNDER: ASSESSMENT YEAR DISALLOWANCE 2009-10 RS.5,12,810/- 2012-13 RS.52,14,723/- A PERUSAL OF THE ASSESSMENT ORDERS FOR THE RESPECTIVE ASSESSMENT YEARS SHOW THAT DISALLOWANCE HAS BEEN MADE UNDER CLAUS E (III) OF RULE 8D(2) I.E. .5% OF THE AVERAGE VALUE OF INVESTMENT. IT IS AN UNDISPU TED FACT THAT IN BOTH THE ASSESSMENT YEARS UNDER APPEAL, THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME. WE FIND THAT THE HON'BLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD. VS. COMMISSIONER OF INCOME TAX, 378 ITR 33 (DELHI) HAS HELD THAT WHERE NO EXEMPT INCOME HAS BEEN EARNED BY THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR, NO DISALLOWANCE U/S.14A IS TO BE MADE. SIMILAR VIEW HAS BEEN TAKEN BY THE HON'BLE MADRAS HIGH COURT IN THE CASE OF REDINGTON (INDIA) LTD. VS. ADDITIONAL COMMISSIONER OF INCOME TA X REPORTED AS 392 ITR 633 AND THE HON'BLE GUJARAT HIGH COURT IN T HE CASE OF COMMISSIONER OF INCOME TAX VS. CORRTECH ENERGY P. LTD. RE PORTED AS 372 ITR 97. THUS, IN VIEW OF UNREBUTTED FACTS AND IN THE LIGHT OF JUDGMENTS MENTIONED ABOVE, WE ARE OF CONSIDERED VIEW THAT NO DISALLO WANCE UNDER RULE 8D IS CALLED FOR IN THE IMPUGNED ASSESSMENT YEARS. AC CORDINGLY, THE IMPUGNED ORDERS FOR ASSESSMENT YEARS 2009-10 AND 2012 -13 ARE SET ASIDE AND BOTH THE APPEALS OF ASSESSEE ARE ALLOWED. 4 ITA NOS.985 & 986/PUN/2016 A.YS.2009-10 & 2012-13 6. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 29 TH DAY OF NOVEMBER, 2018. SD/- SD/- ( . / D. KARUNAKARA RAO ) ( ! ' /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 29 TH NOVEMBER, 2018. SB ) * +#,-! .!(, / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-1, PUNE. 4. THE PR. CIT-1, PUNE. 5. %&' () , * () , +,- , / DR, ITAT, B BENCH, PUNE. 6. './ 01 / GUARD FILE. // TRUE COPY // *2 / BY ORDER, 3 (- / PRIVATE SECRETARY * () , / ITAT, PUNE.