DCIT, Central Circle - 2(2), Kolkata , Kolkata V. M/s. Orissa Metaliks Private Limited , Kolkata

ITSSA 68/KOL/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3853 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 07-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Assessee Lawyers: SHIKHA AGA RWAL ACA
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.(SS).A. NO. 68/KOL/2017 ASSESSMENT YEAR: 2012-13 DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(2), KOLKATA. VS. M/S. ORISSA METALIKS PVT. LTD. (PAN: AAACO8663L) APPELLANT RESPONDENT DATE OF HEARING 16.07.2018 DATE OF PRONOUNCEMENT 20.07.2018 FOR THE APPELLANT SHRI G. HANGSHING, CIT, DR FOR THE RESPONDENT SMT. SHIKHA AGARWAL, ACA ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE REVENUE IS AGAINST THE ORDER OF LD. CIT(A)-20, KOLKATA DATED 04.05.2017 FOR AY 2012-13. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL OF REVENU E IS AGAINST THE ACTION OF LD. CIT(A) IN DELETING THE DISALLOWANCE MADE BY AO U/S. 14A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) ON THE GROUND THAT THERE WAS NO EXEMPT INCOME EARNED BY THE ASSESSEE. 3. BRIEFLY STATED FACTS ARE THAT THE AO MADE THE DI SALLOWANCE U/S. 14A READ WITH RULE 8D(2)(III) OF THE I. T. RULES, 1962 AT 0.5% OF AVER AGE VALUE OF INVESTMENTS OF RS.721,647,827/- AT RS.36,08,239/-. ON APPEAL, THE LD. CIT(A) TAKING NOTE THAT THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME TAKING NOTE OF JUD ICIAL PRECEDENTS HAVE ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED, REVENUE IS NOW IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT ADMITTEDLY THE ASSESSEE HAD NOT EARNED ANY EXEMPT INCOME IN THE 2 IT(SS)A NO.68/KOL/2017 ORISSA METALIKS PVT. LTD.., AY 2012-13 2 RELEVANT ASSESSMENT YEAR. SINCE THE ASSESSEE HAS NO T EARNED ANY TAX FREE INCOME, THE DISALLOWANCE U/S. 14A OF THE ACT IS NOT CALLED FOR. WE NOTE THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHEMINVEST LTD. (2015) 378 ITR 33 (DEL.) HAS HELD THAT SECTION 14A WILL NOT APPLY WHERE NO EXEMPT INCOME IS EARNED DURING THE RELEVANT PREVIOUS YEAR. SINCE IN THIS CASE IT IS AN UNDISPUTED FACT THAT TH E ASSESSEE DID NOT EARN EXEMPT INCOME, DISALLOWANCE OF EXPENDITURE AS PER SECTION 14A IS N OT WARRANTED. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LD. CIT(A) AND, THEREFORE , WE UPHOLD THE SAME. APPEAL OF REVENUE IS DISMISSED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20.07.2018 . SD/- SD/- [ DR. A. L. SAINI] [A.T. VARKEY] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20TH JULY, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT DCIT, CENTRAL CIRCLE-2(2), KOLKATA. 2 RESPONDENT M/S. ORISSA METALIKS PVT. LTD., 39, SHAKESPEARE SARANI, 6 TH FLOOR, KOLKATA-700 001. 3. THE CIT(A) -20, KOLKATA. (SENT THROUGH E-MAIL) 4. 5. CIT KOLKATA DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY