Deputy Commissioner Of Income Tax, Central Circle- 2(2), Bangalore V. M/s. GMR Enterprises Private Limited, Bengaluru

MA 6/BANG/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4960 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-03-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 03-02-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL JAIN
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES “A”, BANGALORE Before Shri George George K, JM & Shri B.R.Baskaran, AM MA No.6/Bang/2022 : Asst.Year 2015-2016 (Arising out of IT(TP)A No.2310/Bang/2019) The Deputy Commissioner of Income-tax, Central Circle 2(2) Bangalore. v. M/s.GMR Enterprises Pvt.Ltd. (Successor to GMR Holdings Private Limited) No.25/1 Skip House, Museum Road Bangalore – 560 025. PAN : AACCR1554R. (Applicant) (Respondent) Applicant by : Sri.Narayana K.R., Addl.CIT-DR Respondent by : Sri.Sunil Jain, AR Date of Hearing : 18.03.2022 Date of Pronouncement : 18.03.2022 O R D E R Per George George K, JM : This Miscellaneous Application at the instance of the Revenue is seeking to rectify certain mistakes apparent on record in ITAT’s order dated 28.10.2021 in IT(TP)A No.2310/Bang/2019. 2. The Tribunal vide paragraph 3.5 to 3.7 had adjudicated the disallowance made by the A.O. u/s 14A of the I.T.Act. The Tribunal directed that the disallowance should be restricted to the exempt income earned during the relevant assessment year. The Tribunal directed the A.O. to restrict the disallowance to Rs.27,37,47,187 (refer para 3.5 and 3.7 of the Tribunal order). MA No.6/Bang/2022 M/s.GMR Enterprises Private Limited. 2 3. The learned Departmental Representative submitted that there is also exempt income in the form of Long Term Capital Gain (LGCG) from the sale of listed shares, which was claimed as exempt u/s 10(38) of the I.T.Act. It was submitted that the amount of LTCG claimed as exempt u/s 10(38) of the I.T.Act amounting to Rs.17,81,45,075 also needs to be added to the exempt income while calculating the disallowance u/s 14A of the I.T.Act. In other words, it was submitted that there are two exempt income, i.e. u/s 10(34) and 10(35) of the I.T.Act in the form of dividend income and other in the form of sale of listed shares, which is claimed as exempt as LTCG u/s 10(38) of the Act. However, the order of the Tribunal is silent on exempt income u/s 10(38) of the Act. 4. The learned AR fairly submitted that the LTCG claimed as exempt u/s 10(38) of the Act amounting to Rs.17,81,45,075 also needed to be added to the exempt income for the purpose of disallowance u/s 14A of the I.T.Act. 5. We have heard rival submissions and perused the material on record. The Tribunal while restricting the disallowance u/s 14A of the I.T.Act, had committed an error in not including in the exempt income the LTCG amounting to Rs.17,81,45,075 (claimed as exempt u/s 10(38) of the Act). Therefore, there is an apparent mistake in the Tribunal’s order at paragraph 3.5 and 3.7, wherein the figure of Rs.27,37,47,187 is only mentioned. The same is correct by adding a sum of Rs.17,81,45,075, which is claimed as exempt u/s 10(38) of the Act. Therefore, we direct the A.O. to restrict the disallowance u/s 14A of the Act to Rs.45,18,92,262 MA No.6/Bang/2022 M/s.GMR Enterprises Private Limited. 3 (27,37,47,187 + 17,81,45,075) instead of Rs.27,37,47,187 mentioned in the original order of the Tribunal at paragraph 3.5 and 3.7 of its order. It is ordered accordingly. 6. In the result, the miscellaneous application filed by the Revenue is allowed. Order pronounced on this 18 th day of March, 2022. Sd/- (B.R.Baskaran) Sd/- (George George K) ACCOUNTANT MEMBER JUDICIAL MEMBER Bangalore; Dated : 18 th March, 2022. Devadas G* Copy to : 1. The Applicant. 2. The Respondent. 3. The DRP-1, Bangalore. 4. The Pr.CIT, Central Circle, Bangalore. 5. The DR, ITAT, Bengaluru. 6. Guard File. Asst.Registrar/ITAT, Bangalore