ACIT,Central Circle-2(4), Kolkata, Kolkata V. M/s. Asian Tea & Exports Pvt. Ltd, Kolkata

ITSSA 145/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4899 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 12-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

1 ITA NO145/KOL/2017 M/S ASIAN TEA & EXPORTS PVT. LTD. A.Y.2012-13 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI A. T. VARKEY, JM & DR.A.L.SAINI, AM] I.T.A. NO. 145/KOL/2017 ASSESSMENT YEAR: 2012-13 A.C.I.T., CENTRAL CIRCLE-2(4), KOLKATA VS. M/S ASIA N TEA & EXPORTS PVT. LTD. PAN NO.AACCA 4877 C APPELLANT RESPONDENT DATE OF HEARING 22.10.2018 DATE OF PRONOUNCEMENT 26 .10.2018 FOR THE APPELLANT SHRI A.K.NAYAK, C.I.T.(DR) FOR THE RESPONDENT NONE ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)- 20, KOLKATA DATED 21.02.2017 FOR A.Y.2012-13. 2. THOUGH WE NOTE THAT NONE APPEARED FOR THE ASSESS EE, WE FIND THAT THE ONLY ISSUE THAT HAS BEEN RAISED BY THE REVENUE IS AGAINST THE ACTION OF LD. CIT(A) IN DELETING THE DISALLOWANCE OF RS.63,83,008/- MADE BY THE AO U/S 1 4A R.W.R.8D. WE NOTE THAT THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE TAKING NOTE OF THE IMPORTANT FACT THAT THE ASSESSEE DID NOT RECEIVE ANY DIVIDEND/EXEMPT INCOME . SINCE THE ASSESSEE IS NOT IN RECEIPT OF ANY DIVIDEND INCOME THEN APPLICATION OF SECTION 14A OF THE ACT TO DISALLOW EXPENDITURE FOR EARNING THE EXEMPT INCOME DOES NOT ARISE AS HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS CHEMINVEST LTD 378 ITR 33 (DEL) WHEREIN THE HONBLE HIGH COURT HELD THAT THERE BEING NO EXEMPT INCOME EARNED BY THE ASSESSEE, NO 2 ITA NO145/KOL/2017 M/S ASIAN TEA & EXPORTS PVT. LTD. A.Y.2012-13 DISALLOWANCE U/S 14A OF THE ACT IS WARRANTED. THERE FORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD CIT(A) WHICH IS IMPUGNED BEFORE US. HOWEVER, THE LD.,CIT(DR) VEHEMENTLY ARGUED THAT THE AMRITSAR BENCH OF THE TR IBUNAL IN THE CASE OF LALI MOTORS VS PCIT 93 TAXMANN. 39 WHEREIN THE TRIBUNAL HAS HEL D THAT EVEN IF THERE IS NO DIVIDEND INCOME THEN SECTION 14A R.W.R. 8D IS APPLICABLE. H OWEVER, WE TAKE NOTE OF THE HONBLE DELHI HIGH COURTS DECISION IN THE CASE OF CHEMINVEST LTD. (SUPRA) WHEREIN IT IS HELD AS FOLLOWS :- '15. TURNING TO THE CENTRAL QUESTION THAT ARISES FO R CONSIDERATION, THE COURT FINDS THAT THE COMPLETE ANSWER IS PROVIDED BY THE DECISIO N OF THIS COURT IN CIT V. HOLCIM INDIA (P) LTD. (DECISION DATED 5TH SEPTEMBER 2014 IN ITA NO. 486/2014). IN THAT CASE A SIMILAR QUESTION AROSE, VIZ., WHETHE R THE ITAT WAS JUSTIFIED IN DELETING THE DISALLOWANCE UNDER SECTION 14A OF THE ACT WHEN NO DIVIDEND INCOME HAD BEEN EARNED BY THE ASSESSEE IN THE RELEVANT AY? THE COURT REFERRED TO THE DECISION OF THIS COURT IN MAXOPP INVESTMENT LTD. (S UPRA) AND TO THE DECISION OF THE SPECIAL BENCH OF THE ITAT IN THIS VERY CASE I. E. C HEMINVEST LTD. V. CIT (2009) 317 ITR 86. THE COURT ALSO REFERRED TO THREE DECISIONS OF DIFFERENT HIGH COURTS WHICH HAVE DECIDED THE ISSUE AGAINST REVENUE. THE FIRST W AS THE DECISION IN COMMISSIONER OF INCOME TAX, FARIDABAD V. M/S. LAKHA NI MARKETING INCL. (DECISION DATED 2ND APRIL 2014 OF THE HIGH COURT OF PUNJAB AND HARYANA IN ITA NO. 970/2008) WHICH IN TURN REFERRED TO TWO EARLIER DECISIONS OF THE SAME COURT IN CITV. HERO CYCLES LIMITED [2010} 323 ITR518 AND CI TV. WINSOME TEXTILE INDUSTRIES LTD. [2009] 319 ITR 204. THE SECOND WAS OF THE GUJARAT HIGH COURT IN COMMISSIONER OF INCOME TAX I V. CORRTECH ENERGY (P) LTD. [2014} 223 TAXMANN 130 (GUJ.) AND THE THIRD OF THE ALLAHABAD HIGH COUR T IN COMMISSIONER OF INCOME TAX, KANPUR V. SHIVAM MOTORS (P) LTD. (DECISION DAT ED 5TH MAY 2014 IN ITA NO. 88/2014). THESE THREE DECISIONS REITERATED THE POSI TION THAT WHEN AN ASSESSEE HAD NOT EARNED ANY TAXABLE INCOME IN THE RELEVANT AY IN QUESTION 'CORRESPONDING EXPENDITURE COULD NOT BE WORKED OUT FOR DISALLOWANC E. ' 3. SINCE THE ASSESSEE IS NOT IN RECEIPT OF ANY DIVI DEND INCOME RELYING ON THE ORDER OF HONBLE HIGH COURT OF DELHI IN CHEMINVEST LTD (S UPRA) WE UPHOLD THE ORDER OF LD. CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 3 ITA NO145/KOL/2017 M/S ASIAN TEA & EXPORTS PVT. LTD. A.Y.2012-13 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER 2018 SD/- SD/- (DR.A.L.SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 26 TH OCTOBER 2018 RG(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT A.C.I.T., CENTRAL CIRCLE-2(4), KOLKATA 2 RESPONDENT M/S ASIAN TEA & EXPORTS PVT. LTD., SIK KIM COMMERCE HOUSE, 4/1, MIDDLETON STREET, KOLKATA-700071. 3. 5. C.I.T.(A)-20, 4. C.I.T.- KOLKATA CIT (DR) KOLKATA BENCHES, KOLKATA. / TRUE COPY, BY ORDER, ASSTT. REGISTRAR . ITAT KOLKATA BENCHES, KOLKATA