Income Tax Officer, Ward-17(4), Hyderabad V. YRCR Infrastructure Limited, Hyderabad, Hyderabad

MA 33/Hyd/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6589 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-05-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 28-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GE E TINDERMANN
• Assessee Lawyers: P VINOD
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC - A BENCH : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT M.A. NO.33/HYD/2018 (ARISING OUT OF ITA.NO.1702/HYD/2016 ) ASSESSMENT YEAR 2013 - 2014 INCOME TAX OFFICER, WARD - 17(4), HYDERABAD. VS. M/S. YRCR INFRASTRUCTURE LIMITED, 843, YETURU, BANJARA HILLS, HYDERABAD 500 034. PAN: AAACY0853G (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI P. VINOD FOR REVENUE : SMT. GEETINDER MANN, DR DATE OF HEARING : 04.05.2018 DATE OF PRONOUNCEMENT : 04.05.2018 ORDER PER D. MANMOHAN, VP. REVENUE FILED A PETITION SEEKING RECALL OF THE ORDER DATED 29.09.2017 ON THE GROUND THAT THE TRIBUNAL HAS NOT TAKEN INTO CONSIDERATION THE CIRCULAR ISSUED BY CBDT (CIRCULAR NO. 5/2014, DATED 11.02.2014) WHEREIN IT WAS CLARIFIED THAT IRRESPECTIVE OF THE FACT THAT WHETHER THE ASSESSEE HAS EARNED EXEMPT INCOME OR NOT, THE AMOUNT DISALLOWABLE U/S 14A OF THE ACT HAS TO BE COMPUTED BY APPLYING RULE 8D. 2. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT THE ITAT HYDERABAD BENCHES HAVE BEEN CONSISTENTLY TAKING A STAND THAT IN THE ABSENCE OF ANY EXEMPT INCOME EARNED IN THE YEAR UND ER CONSIDERATION, PROVISIONS OF SECTION 14A DOES NOT GET ATTRACTED AND IN ORDER TO COME TO SUCH CONCLUSION THE TRIBUNAL HAS BEEN FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LTD VS. ITO. IF THE LANGUAGE OF STATUTE IS VERY CLEAR , A CIRCULAR ISSUED BY THE CBDT CANNOT DILUTE THE MEANING OF THE SAID PROVISION IN WHICH EVENT EARNING OF EXEMPT INCOME IS A MUST IN ORDER TO INVOKE THE PROVISIONS OF SECTION 14A OF THE INCOME TAX ACT, 1961. LEARNED COUNSEL FOR THE ASSESSEE REFERRED TO A LATEST DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PR. COMMISSIONER OF INCOME TAX VS. IL & FS ENERGY 2 DEVELOPMENT COMPANY LTD (ITA NO. 520/2017, DATED 16.08.2017) WHEREIN THE COURT CONSIDERED THE ISSUE IN DETAIL AND FINALLY OBSERVED AS UNDE R: 24. FOR ALL OF THE AFOREMENTIONED REASONS, THIS COURT IS OF THE VIEW THAT THE CBDT CIRCULAR DATED 11 TH MAY, 2014 CANNOT OVERRIDE THE EXPRESSED PROVISIONS OF SECTION 14A READ WITH RULE 8D. HE THUS SUBMITTED THAT THE ORDER PASSED BY THE TRIBUNAL IS IN ACCORDANCE WITH LAW. 3. I HAVE ALSO HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND CAREFULLY PERUSED THE RECORD. THE DECISION OF THE TRIBUNAL IS IN CONSONANCE WITH THE CONSISTENT VIEW TAKEN BY THE ITAT , BY INTERPRETING THE PLAIN MEANING OF THE SECTIO N , WHICH IS IN LINE WITH THE VIEW TAKEN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF IL & FS ENERGY DEVELOPMENT COMPANY LTD (SUPRA) AND THUS IT CANNOT BE SAID THAT THE DECISION OF THE ITAT, SMC A BENCH IS BAD IN LAW. IN OTHERWORDS, THERE IS NO MISTAKE APPARENT FROM THE RECORD WHICH REQUIRES RECTIFICATION. THEREFORE, THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. PRONOUNCED ACCORDINGLY IN THE OPEN ON 04 TH MAY, 2018. SD/ - (D. MANMOHAN) VICE PRESIDENT HYDERABAD, DATED: 04 TH MAY , 201 8 OKK, SR.PS COPY TO 1. K. VASANTKUMAR, A.V. RAGHU RAM, P. VINOD AND M. NEELIMA DEVI, ADVOCATES, 610, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD - 1. 2. ITO, WARD 17(4), 9 TH FLOOR, SIGNATURE TOWERS, KONDAPUR, HYDERABAD. 3. CIT (A) - 5, HYDERABAD. 4. PR. CIT - 5, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE