Income Tax Appellate Tribunal - Mumbai
M\U005Cs A.B.G. Ports Limited, Mumbai vs Dcit5(1)(1), Mumbai on 24 November, 2017
आयकर अपीऱीय अधिकरण, मुंबई न्यायपीठ "डी" मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, MUMBAI BEFORE HON'BLE S/SHRI JOGINDER SINGH (JM), AND RAJESH KUMAR,(AM) I.T.A. No.3085/Mum/2016 (निर्धारण वर्ा / Assessment Year:2012-13) M/s ABG Ports Limited, Dy.Commissoner of Income Tax 5th floor, Bhupati Chambers, -5(1)(1), 13, Mathew road, Opera house, बनाम/ Mumbai.
Mumbai-400004 Vs.
अपीऱाथी की ओर से / Assessee by : None
प्रत्यथी की ओर से/ Revenue by : Shri Rajat Mittal
PAN : AAHCA1523A
सुनवाई की तारीख /Da te o f He a r in g : 26.10.2017
घोषणा की तारीख /Da te o f Pro n ou n ce me nt : 24.11.2017
आदे श / O R D E R
PER RAJESH KUMAR, A. M:
This is an appeal filed by the assessee challenging the order of the ld.CIT(A), Mumbai, dated 20.11.2016 for the assessment year 2012-13 wherein the assessee challenged the confirmation of disallowance of Rs.31,04,835/- u/s 14A of the Income Tax Act, 1961 r.w.rule 8D of the Income Tax Rules, 1962 without appreciating the facts that 99.999% investments made by the assessee are in its subsidiary companies made for strategic purposes.
2
I.T.A. No.3085/Mum/2016
2. At the outset, we would like to mention here that neither the assessee nor his authorized representative appeared before this Tribunal when the appeal was called for hearing nor there was any application seeking adjournment of the hearing received in the office of the Tribunal despite service of notice through RPAD. Therefore, we proceed to dispose of the appeal of the assessee ex-parte after hearing the ld. DR.
3. The facts in brief are that the assessee has filed return of income on 29.9.2012 declaring a total income of Rs.3,24,66,900/- which was processed under section 143(1) of the Act. The case of the assessee was selected for scrutiny and accordingly statutory notices u/s 143(2) and 142(1) were issued and served upon the assessee. During the course of assessment proceedings, the AO observed that the assessee has made investments in shares which are capable of yielding dividend income nevertheless no dividend income was received during the year. The total investments of the assessee in shares and securities were Rs.62,09,54,000/- and according to the AO, the assessee should have made disallowance of expenditure in relation to the income which was not forming part of the total income of the assessee under section 14A read with rule 8D of the Act/Rules. A show cause notice was issued calling upon the assessee as to why the provisions of section 14A read with rule 8D should not be applied to work out the disallowance. It was submitted before the AO that the assessee has not incurred any expenditure on earning of 3 I.T.A. No.3085/Mum/2016 exempt income in the light of facts that during the year no dividend income has been received by the assessee and no such expenses were incurred. However, the reply of the assessee did not find favour with the AO and He ,by invoking the provisions of section 14A r.w.s.8D, disallowed an amount of Rs.31,04,835/- u/r 8D(2)(iii) by framing the assessment under section 143(3) of the Act order dated 7.1.2015 assessing the total income at Rs.3,55,71,730/- under the normal provisions of Act and Rs.3,63,51,954/- under section 115JB of the Act. Aggrieved by the order of the ld.AO, the assessee preferred an appeal before the ld.FAA, who also dismissed the appeal of the assessee. Now the assessee is in appeal before us.
4. We have heard the ld. DR and perused the material placed before us. The undisputed facts of the case are that the assessee made investments in the tax free securities amounting to Rs.62,09,54,000/- out of which 99.999% were made in the subsidiary companies to gain control over the said subsidiary for strategic purposes. Moreover, the assessee has not received any dividend income during the year and the findings to that effect has already been recorded by the lower authorities in their respective orders. Having considered the facts of the case, we are of the view that there is no exempt income during year and hence no disallowance could be made with regards to expenses attributable to earning of exempt income. The case of the assessee also supported by the decision of the Co-ordinate Bench of the 4 I.T.A. No.3085/Mum/2016 Tribunal in the case of M/s Daga Global Chemicals Pvt Ltd V/s ACIT in ITA No.5592/Mum/2012. Following the said order, we allow the appeal of the assessee and direct the AO to give effect of this order.
5. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 24th NOV, 2017.
Sd sd (JOGINDER SINGH) ( RAJESH KUMAR) Judicial Member Accountant Member मुंबई Mumbai; ददन ुंक Dated : 24.11.2017 Sr.PS:SRL:
आदे श की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to :
1. अपीऱाथी / The Appellant
2. प्रत्यथी / The Respondent
3. आयकर आयुक्त(अपीऱ) / The CIT(A)
4. आयकर आयुक्त / CIT - concerned
5. ववभागीय प्रतततनधि, आयकर अपीऱीय अधिकरण, मुुंबई / DR, ITAT, Mumbai
6. गार्ड फाईऱ / Guard File आदे श नस र/ BY ORDER, True copy उि/सह यक िुंजीक र (Dy./Asstt. Registrar) आयकर अिीऱीय अधिकरण, मुुंबई / ITAT, Mumbai