TRAVEL FOOD SERVICES LTD (AS NOW SNVK HOSPITALITY AND MANAGEMENT PVT LTD MERGED WITH TRAVEL FOOD SERVICES LTD),MUMBAI V. DCIT CIRCLE 8(3)(1), MUMBAI

ITA 423/MUM/2025

AI Insights

The case involves Travel Food Services Ltd., which appealed against the order of the Commissioner of Income-tax (Appeals) confirming the disallowance of Rs. 20,83,649 under section 14A of the Income Tax Act. The disallowance was initially made by the Assessing Officer, invoking section 14A read with rule 8D of the Income Tax Rules, 1962, which pertains to the disallowance of expenses incurred in relation to income not chargeable to tax. The main contention of the assessee was that no exempt income was earned during the relevant assessment year, 2017-18. The tribunal, referencing decisions from the Mumbai bench and the Delhi High Court, agreed with the assessee, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471363 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2017-2018
• Other Referred Cases: Sahara India Financial Corporation Ltd. vs. Taxmann.com 165 (Delhi), Welspun Steel Ltd. vs. Taxmann.com 720 (Mumbai)
• Laws Referred To: Income Tax Act, Income Tax Act, 1961, Income Tax Rules, 1962
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HEMANSHU JOSHI
• Assessee Lawyers: SAMIR SHAH
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 423/MUM/2025 Assessment Year: 2017-18 Travel Food Services Ltd. (As Now SNVK Hospitality And Management Pvt. Ltd. Merged with Travel Food Service Ltd.) Block A South Wing 1st floor Shiv Sagar Estate, Dr. Annie Besant Road, Worli, Mumbai 400018 Vs. Dy. CIT, Circle 8(3)(1), Mumbai Room No. 624, Aayakar Bhawan, Maharshi Karve Road, New Marine Line, Mumbai 400020 PAN NO. BIAPS 8725 F Appellant Respondent Assessee by : Mr. Samir Shah Revenue by : Mr. Hemanshu Joshi, Sr. DR Date of Hearing : 18/03/2025 Date of pronouncement : 18/03/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 25.11.2024 passed by the Ld. Commissioner of Income-tax (Appeals) [in short ‘the Ld. CIT(A)’] for assessment year 201 raising following grounds: 1. “The Ld Faceless CIT(A) has case in confirming the Daction of Assessing Officer in disallowing Rs. 20.83,649 under section 14A of the Income Tax Act. The action in unjustified and unwarranted. 2. Your Petitioners carve leave to add, amend, alter and/ all or any of aforesaid grounds of appeal. 2. We have heard rival submission relevant record. In the ground Rs. 20,83,649/- mad Income-tax Act, 1961 Rule 1962 [In short ‘the Rules’] assessing officer has been counsel for the assessee submit earned during the year under consideration. Ld. counsel referred to the para 3 of the assessment order as well as copy of the computation of the income was earned during the year under consid not dispute this fact. Ld. counsel further reled coordinate bench of the Tribunal in the case of reported in (2024) 167 taxmann.com 720 ( Mumbai relied on the decision of th Sahara India Financial Corporation Ltd. taxmann.com 165 (Delhi), w will be made if no exempt income is earned the year under consider Travel Food Services Ltd. ITA No. (Appeals) [in short ‘the Ld. CIT(A)’] for assessment year 201 raising following grounds: The Ld Faceless CIT(A) has erred in law and on the facts of the case in confirming the Daction of Assessing Officer in disallowing Rs. 20.83,649 under section 14A of the Income Tax Act. The action in unjustified and unwarranted. Your Petitioners carve leave to add, amend, alter and/ all or any of aforesaid grounds of appeal.” We have heard rival submission of the parties and perused the n the ground raised, sole issue is disallowance of made by assessing officer invoking tax Act, 1961 [In short ‘the Act’] r.w.r. 8D of the Income [In short ‘the Rules’]. This disallowances made by the has been sustained by ld. CIT(A). Before us, Ld. counsel for the assessee submitted that no exempted income was earned during the year under consideration. Ld. counsel referred to the para 3 of the assessment order as well as copy of the income file to support that no exempted income was earned during the year under consideration. Ld. D s fact. Ld. counsel further reled on the decision of the coordinate bench of the Tribunal in the case of Welspun Steel Ltd. (2024) 167 taxmann.com 720 ( Mumbai on the decision of the Hon’ble Delhi High Court in case of Sahara India Financial Corporation Ltd. reported in taxmann.com 165 (Delhi), wherein it is held that no disallowances will be made if no exempt income is earned by the assessee the year under consideration. Travel Food Services Ltd. 2 ITA No. 423/MUM/2025 (Appeals) [in short ‘the Ld. CIT(A)’] for assessment year 2017-18, erred in law and on the facts of the case in confirming the Daction of Assessing Officer in disallowing Rs. 20.83,649 under section 14A of the Income Tax Act. The action Your Petitioners carve leave to add, amend, alter and/or withdraw and perused the s disallowance of e by assessing officer invoking u/s 14A of the of the Income-tax disallowances made by the by ld. CIT(A). Before us, Ld. no exempted income was earned during the year under consideration. Ld. counsel referred to the para 3 of the assessment order as well as copy of the file to support that no exempted income eration. Ld. DR also did on the decision of the elspun Steel Ltd. (2024) 167 taxmann.com 720 ( Mumbai-Trib) and also Hon’ble Delhi High Court in case of reported in (2024) 168 herein it is held that no disallowances by the assessee during 3. Undisputedly, no exempt assessee in the year following the decision of the Hon’ble Sahara India Financial Corporation Ltd. made by the AO and sustain ground of the appeal of the assessee is accordingly allowed. 4. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on Sd/- (RAJ KUMAR CHAUHAN JUDICIAL MEMBER Mumbai; Dated: 18/03/2025 Disha Raut Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Travel Food Services Ltd. ITA No. no exempted income has been earned by the assessee in the year under consideration, therefore, following the decision of the Hon’ble Delhi High Court Sahara India Financial Corporation Ltd. (supra), the made by the AO and sustained by the ld. CIT (A) is of the appeal of the assessee is accordingly allowed. In the result, appeal of the assessee is allowed. nced in the open Court on 18/03 RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Travel Food Services Ltd. 3 ITA No. 423/MUM/2025 income has been earned by the therefore, respectively Delhi High Court in case of he disallowance ld. CIT (A) is deleted. The of the appeal of the assessee is accordingly allowed. /03/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "