KU POWER PROJECTS LIMITED,HYDERABAD V. COMMISSIONER OF INCOME TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE

ITA 7096/DEL/2025

AI Insights

The case involves KU Power Projects Limited appealing against the order of the CIT(A)/NFAC, Delhi, which upheld the additions and disallowances made by the Income Tax Officer under section 68 and section 14A read with Rule 8D of the Income-tax Act, 1961, for the assessment year 2017-18. The Tribunal condoned the delay in filing the appeal and examined the substantive issues of unexplained cash credits and disallowance of expenses related to exempt income. The Tribunal's decision was influenced by precedents which clarified the non-applicability of the disallowance under section 14A when no exempt income is earned.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 823185 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 05-11-2025
• Other Referred Cases: Collector Land Acquisition v. Mst. Katiji & another, Cheminvest Limited Vs.CIT, PCIT v. Era Infrastructure (I) Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Retrospective amendment; Unexplained cash credit; Earning of tax free income; Rule 8D
• Section: 144; 68; 14A

Judgement Text

"1 ITA No. 7096/Del/2025 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No. 7096/Del/2025 Assessment Year: 2017-18 KU Power Projects Limited, Mr. Kotagiri Indira Priyadarshini Director A-1, Saeedurga Palm Springs, 8-2-544, Road No. 7, Banjara Hills, Hyderabad-500034. PAN:AAdCK 5497 P Vs Income Tax Officer, Ward-14(4), New Delhi. APPELLANT RESPONDENT Assessee represented by Shri K.C. Devdas, AR (Through VC) Department represented by Shri Amit Shukla, Sr. DR Date of hearing 24.12.2025 Date of pronouncement 24.12.2025 O R D E R PER SATBEER SINGH GODARA, JM: This assessee’s appeal ITA no. 7096/Del/2025 for assessment year 2017-18 arises against CIT(A)/ NFAC, Delhi’s order dated 29.11.2023 (DIN & Order No. ITBA/NFAC/S/250/2023-24/1058317335(1), in proceedings u/s 144 of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’. Printed from counselvise.com 2 ITA No. 7096/Del/2025 2. Delay of 701 days in filing of the instant appeal is hereby condoned in light of the assessee’s averments in the condonation application as on account of circumstances beyond its control in light of Collector Land Acquisition v. Mst. Katiji & another (1987) 167 ITR 471 (SC). Heard both the parties. Case file perused. 3. The assessee’s first and foremost substantive ground raised in the instant appeal challenges correctness of both the learned lower authorities’ action, inter alia, making section 68 unexplained cash credits addition of Rs. 13,55,000/- in assessment order dated 04.12.2019 & upheld in the lower appellate discussion. 4. A perusal of the case records suggests that the impugned entire investment of Rs. 6,77,50,000/-; added @ 2% amounting to Rs. 13,55,000/-, in question, relates to F.Y. 2015-16 relevant to A.Y. 2016-17 than in the assessment year 2017- 18 before the tribunal. Deleted in very terms therefore. 5. Next comes the second substantive issue between the parties regard section 14A read with Rule 8D disallowance of Rs. 28,78,991/- made by both the learned lower authorities despite the fact that the assessee is stated to have not derived any exempt income in the relevant previous year. Case law Cheminvest Limited Vs.CIT (2015) 378 ITR 33 (Delhi HC) has already settled the issue that the impugned disallowance does not get attracted it’s assence if exempt Printed from counselvise.com 3 ITA No. 7096/Del/2025 income. It is further made clear that their lordships’ yet another decision (2022) 141 taxmann.com 289 PCIT v. Era Infrastructure (I) Ltd. has rejected the Revenue’s endeavour to apply section 14A Explanation; inserted vide Finance Act, 2022; w.e.f. 01.04.2022 with retrospective effect. Deleted accordingly. 6. This assessee’s appeal is allowed. Order pronounced in open court on 24.12.2025. Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 29.12.2025. *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "