NADIA DISTRICT CENTRAL CO-OPERATIVE BANK LTD.,NADIA V. I.T.O., WARD - 41(1), NADIA, NADIA

ITA 2092/KOL/2024

AI Insights

The case involves the Nadia District Central Cooperative Bank Ltd., which appealed against the order of the Commissioner of Income Tax, National Faceless Appeal Centre, Delhi. The appeal was directed against the addition of Rs. 4,96,74,510 made under Section 14A of the Income Tax Act, read with Rule 8D of the Income Tax Rules, 1962. This addition was initially confirmed by the lower authorities, citing notional expenditure incurred for earning tax-exempt income. The Tribunal, referencing the decision of the Hon'ble Delhi High Court in Cheminvest Ltd. Vs. CIT and other similar cases, ruled that since the assessee did not earn any tax-exempt income, no disallowance under Section 14A was applicable.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35829 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Other Referred Cases: Cheminvest Ltd. Vs. CIT, CIT vs. M/s. Holcim India Pvt. Ltd., CIT v. Shivam Motors (P.) Ltd., CIT vs. Ashika Global Securities Ltd.
• Laws Referred To: Income Tax Act, 1961, Income Tax Rules, 1962
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 250; 14A

Judgement Text

"आयकर अपीलȣय अͬधकरण कोलकाता 'A' पीठ, कोलकाता मɅ IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA Įी संजय गग[, ÛयाǓयक सदèय एवं Įी संजय अवèथी, लेखा सदèय क े सम¢ Before SRI SANJAY GARG, JUDICIAL MEMBER & SRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No. 2092/KOL/2024 Assessment Year: 2020-21 Nadia District Central Cooperative ………. Appellant Bank Ltd. Samabay Building, M. M. Ghosh Street, Krishnanagar, Nadia-741101, West Bengal. (PAN: AAALN0139M) Vs. ITO, Ward-41(1), Nadia. ......... Respondent Appearances: Appellant represented by : Shri P. K. Ray, Advocate Respondent represented by : Shri Subhendu Datta, CIT, DR Date of concluding the hearing : December 23, 2024 Date of pronouncing the order : December 30, 2024 ORDER I.T.A. No. 2092/KOL/2024 Assessment Year: 2020-21 Nadia Dist. Central Cooperative Bank Ltd. Page 2 of 3 Per Sanjay Garg, Judicial Member: The present appeal filed by the assessee is directed against the order dated 21.08.2024 of the Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for Assessment Year 2020-21. 2. This assessee in this appeal is aggrieved by the action of the lower authorities in making/confirming the addition of Rs.4,96,74,510/- made by the lower authorities u/s. 14A of the Act read with Rule 8D of the Income Tax Rules, 1962 (hereinafter referred to as the “Rules”) on account of notional expenditure incurred by the assessee for earning of tax exempt income. 3. At the outset, the Ld. Counsel for the assessee has submitted that the assessee during the year did not earn any tax exempt income. The issue is squarely covered by the decision of Hon’ble Delhi High Court in the case of Cheminvest Ltd. Vs. CIT 378 ITR 33 (Del.) wherein it has been held that there being no exempt income earned by the assessee, no disallowance u/s. 14A to be made. The aforesaid proposition has been further confirmed by various Hon’ble High Courts and Tribunal viz., CIT vs. M/s. Holcim India Pvt. Ltd. in ITA no. 486/2014 and ITA no. 299/2014; Judgment dt. 5-9-2014, CIT v. Shivam Motors (P.) Ltd. [2015] 230 Taxman 63 and CIT vs. Ashika Global Securities Ltd. (G.A. No. 2122 of 2014) dt. 11/06/2018. 4. In these case laws, Hon’ble High Courts have been unanimous to hold that where the assessee has not derived any tax exempt income from investments, then no disallowance is attracted u/s. 14A of the Act. 5. In view of the above stated position of law, no disallowance u/s. 14A of the Act is attracted in this case. The disallowance made by the lower authorities u/s. 14A is accordingly, deleted. I.T.A. No. 2092/KOL/2024 Assessment Year: 2020-21 Nadia Dist. Central Cooperative Bank Ltd. Page 3 of 3 6. In the result, the appeal of the assessee stands allowed. Order pronounced in the open Court on 30th December, 2024. Sd/- Sd/- [Sanjay Awasthi] [Sanjay Garg] Accountant Member Judicial Member Dated: 30.12.2024 Jd., Sr.P.S) Copy of the order forwarded to: 1. Appellant – Nadia Dist. Central Cooperative Bank Ltd., Nadia 2. Respondent – ITO, Ward-41(1), Nadia 3. CIT(A)-NFAC, Delhi . 4. Pr. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "