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Income Tax Appellate Tribunal - Mumbai

Deputy Commissioner Of Income ... vs Hdil Infra Projects Private Limited, ... on 28 October, 2017

                IN THE INCOME TAX APPELLATE TRIBUNAL
                          "SMC" Bench, Mumbai

               Before Shri R.C. Sharma, Accountant Member

                          ITA No.4514 /Mum/2017
                          (Assessment Year: 2012-13)

     D C I T - 14|(2)(1)               M/s. HDIL Infra Projects P. Ltd.
     Room No. 432, 4th Floor           9th Floor, HDIL Towers
                                   Vs.
     Aayakar Bhavan, M.K. Road         Anant Kanekar Marg
     Mumbai 400020                     Bandra (E), Mumhai 400051
                             PAN - AABCH9573R
               Appellant                          Respondent

                     Appellant by:    Smt. N. Hemalatha
                     Respondent by:   Shri Sashank Dundu

                     Date of Hearing:       24.10.2017
                     Date of Pronouncement: 28.10.2017

                                  ORDER

Per R.C. Sharma, A.M.

This is an appeal filed by the Revenue against the order of the CIT(A) for A.Y. 2012-13.

2. In this appeal Revenue is aggrieved for deleting the disallowance made under section 14A.

3. At the outset the learned A.R. of the assessee, Shri Sashank Dundu, invited our attention to the fact that there is no exempt income during year under consideration, therefore, the CIT(A) was justified in deleting the addition made under section 14A. Reliance was also placed on the decision of the Hon'ble Delhi High Court in the case of IL & FS Energy Development Company Ltd. 84 taxmann.com 186 and the decision of the Hon'ble Madras High Court in the case of Redington (India) Ltd. 392 ITR 633 in support of the proposition that no disallowance can be made when there is no exempt income.

M/s. HDIL Infra Projects P. Ltd.

4. The learned D.R. fairly agreed that there was no exempt income as per the findings recorded by the CIT(A).

5. I have considered the rival contentions and carefully gone through the orders of the authorities below and also deliberated on the judicial pronouncements cited by the learned A.R., Shri Sashank and also referred by the lower authorities in their respective orders. The findings recorded by the CIT(A) for deleting the disallowance reads as under: -

"5.3 I have considered the facts of the case and the appellant's submissions. Perusal of the appellant's Profit & Loss Account shows that no dividend income has been earned during the year under consideration. It is also seen from the computation of income that no exempt income has been claimed. It has been held by the various Courts that section 14A cannot be invoked when no exempt income was earned. The Hon'ble Punjab and Haryana High Court in the case of CIT vs Lakhani Marketing (ITA No.970/2008), the Hon'ble Bombay High Court in the case of CIT v. Delite Enterprises - (Income Tax Appeal No. 110 of 2009), Hon'ble Gujarat High Court in the case of CIT vs Cortech Energy (P) Ltd. [2014] 223 taxmann 130(Guj) and the Allahabad High Court in the case of CIT vs Shivam Motors (P) Ltd.(ITA No. 88/2014) have all held that section 14A cannot be invoked when no exempt income was earned. The Hon'ble Delhi High Court in the case of Cheminvest Ltd. vs. CIT 378 ITR 33 (Del) had also held as under:

"23. In the context of the facts enumerated hereinbefore the Court answers the question framed by holding that the expression "does not form part of the total income" in Section 14A of the envisages that there should be an actual receipt of income, which is not includible in the total income, during the relevant previous year for the purpose of disallowing any expenditure incurred in relation to the said income. In other words, Section 14A will not apply if no exempt income is received or receivable during the relevant previous year."

In view of the legal position on the issue as discussed above, the disallowance of Rs.5,14,16,633/- u/s 14A made by the Assessing Officer is deleted. The Aappellant's ground of appeal is allowed."

6. Nothing was brought on record by the learned D.R. to controvert the finding of the CIT(A) that the assessee was not having any exempt income in the year under consideration. Accordingly I do not find any reason to interfere in the order of the CIT(A) deleting the disallowance made under section 14A.

M/s. HDIL Infra Projects P. Ltd.

7. In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 28th October, 2017.

Sd/-

                                                     (R.C. Sharma)
                                                  Accountant Member

Mumbai, Dated:            28th October, 2017

Copy to:

     1.   The   Appellant
     2.   The   Respondent
     3.   The   CIT(A) -22, Mumbai
     4.   The   CIT - 14, Mumbai
     5.   The   DR, "SMC" Bench, ITAT, Mumbai
                                                       By Order

//True Copy//
                                                    Assistant Registrar
                                            ITAT, Mumbai Benches, Mumbai
n.p.