Padmavati Abasan Pvt. Ltd. , Kolkata V. DCIT,CC-4(3),KOL, Kolkata

ITSSA 86/KOL/2023

AI Insights

The case involves Padmavati Abasan Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)-21, Kolkata, concerning the Assessment Year 2015-16. The primary issues in the appeal were the disallowance under Section 14A of the Income Tax Act, 1961, and the treatment of a loss on the sale of shares. The Tribunal found that the assessee had not earned any exempt income, thus the disallowance under Section 14A was not justified. Regarding the loss on the sale of shares, which was initially claimed as a business loss, the Tribunal acknowledged the possibility of it being a capital loss and directed the Assessing Officer to re-examine this aspect.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132626 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-09-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 20-08-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 15-05-2023
• Other Referred Cases: PCIT Vs. Era Infrastructure (India) Ltd. (ITA 204/2022)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KR. AGARWALA
• Assessee Lawyers: AYUSH JAIN
• Keywords: Earning of tax free income; Set aside
• Section: 14A; 250

Judgement Text

| आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता | IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE DR. MANISH BORAD, HON’BLE ACCOUNTANT MEMBER & SHRI SONJOY SARMA, HON’BLE JUDICIAL MEMBER I.T.(SS)A. No. 86/Kol/2023 Assessment Year: 2015-16 Padmavati Abasan Pvt. Ltd. BJ-311, Sector-II Sech Bhawan Saltlake City Kolkata - 700091 [PAN : AAECP4824E] Vs Deputy Commissioner of Income Tax, Central Circle - 4(3), Kolkata अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : Shri Sagar Jain, FCA & Ayush Jain, FCA Revenue by : Shri Sunil Kr. Agarwala, CIT, D/R सुनवाई कᳱ तारीख/Date of Hearing : 21/08/2023 घोषणा कᳱ तारीख /Date of Pronouncement: 25/09/2023 आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The above captioned appeals is directed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals)-21, Kolkata, (hereinafter the “ld. CIT(A)”) dt. 16/03/2023, passed u/s 250 of the Income Tax Act, 1961 (“the Act”) for the Assessment Year 2015-16. 2. The Registry has pointed out that there is a delay of 1 (one) day in filing the present appeal by the assessee. Petition for condonation of delay is placed on record by assessee explaining the reasons. On perusing the same, we are convinced that the assessee was prevented by sufficient cause from filing this appeal in time. Accordingly, we condone the delay and proceed to admit the appeal for hearing. 2 I.T.(SS)A. No. 86/Kol/2023 Assessment Year: 2015-16 Padmavati Abasan Pvt. Ltd. 3. The first issue for our consideration is regarding disallowance made u/s 14A of the Act at Rs. 22,807/-. At the outset, the ld. Counsel for the assessee stated that the assessee has not earned any exempt income during the year. This fact remains uncontroverted at the end of the revenue authorities. We, therefore, in view of the judgment of the Hon’ble Delhi High Court in the case of PCIT Vs. Era Infrastructure (India) Ltd. (ITA 204/2022) judgment dt. 20/07/2022, wherein the Hon’ble Court has held that the amendment made in Section 14A of the Act by Finance Act, 2022, will be applicable prospectively and also held that disallowance u/s 14A of the Act should not exceed the exempt income earned by the assessee during the year, set aside the finding of the ld. CIT(A) and delete the disallowance made u/s 14A of the Act at Rs.22,807/-. 4. The second issue for our consideration is regarding the loss on sale of shares at Rs. 59,90,900/-. After considering the submissions of the assessee and also perusing the records, we notice that the assessee has claimed loss from sale of shares at Rs.59,90,900/-. Since the said equity shares were held as investment by the assessee, ld. Assessing Officer denied the said claim of business loss because assessee did not file any explanation regarding the said claim. Similar view was taken by the ld. CIT(A). Before us, the ld. Counsel for the assessee has claimed that even if the claim is not allowed as business loss, opportunity may be granted to the assessee to claim it as a capital loss, which could be claimed for set off in the subsequent years as per the provisions of law. We find merit in the contention of the ld. Counsel for the assessee because assessee has claimed it as a business loss but the said claim has been denied because the assessee has held it as an 3 I.T.(SS)A. No. 86/Kol/2023 Assessment Year: 2015-16 Padmavati Abasan Pvt. Ltd. investment. If the said loss is not a business loss, which has been admitted by the assessee then such loss from sale of shares is a capital loss and if it is a valid claim then the assessee should be allowed to claim it as a capital loss and carry forward as a capital loss. Further, since the assessee failed to file any details before the Assessing Officer about the alleged loss, we are inclined to restore this issue to the Assessing Officer for examining the said claim of loss from sale of shares which is capital in nature. The ld. Counsel for the assessee has not raised any objection if this issue is restored to the Assessing Officer. We accordingly direct the Assessing Officer to examine the transaction of sale of shares and if the said transactions are found to be genuine then liberty should be granted to the assessee to claim such capital loss to be carried forward in subsequent years. Thus, this issue is allowed for statistical purposes. 5. Other grounds are general in nature and need no adjudication. 6. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the Court on 25 th September, 2023 at Kolkata. Sd/- Sd/- (SONJOY SARMA) (DR. MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated 25/09/2023 *SC SrPs 4 I.T.(SS)A. No. 86/Kol/2023 Assessment Year: 2015-16 Padmavati Abasan Pvt. Ltd. आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Assessee 2. ᮧ᭜यथᱮ / The Respondent 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)- 5. िवभागीय ᮧितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडᭅ फाई/ Guard file. आदेशानुसार/ BY ORDER TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata