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Income Tax Appellate Tribunal - Kolkata

M/S. Prime Movers Auto Associates Pvt. ... vs Dcit, Circle - 1(2), Kolkata , Kolkata on 28 June, 2019

IN THE INCOME TAX APPELLATE TRIBUNAL "D", BENCH KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM आयकरअपीलसं./ITA No.1796/Kol/2018 ( नधारणवष / Assessment Year: 2014-15) M/s Prime Movers Auto Vs. DCIT, Circle-1(2), Kolkata Associates Pvt. Ltd.

P-40, Princep Street, 1st Floor, Kolkata-700072 थायीले खासं . /जीआइआरसं . /PAN/GIR No.: AABCP 4993 R (Assessee) .. (Revenue) Assessee by : None Respondent by : Shri Shankar Halder, JCIT, Sr. DR सुनवाईक तार ख/ Date of Hearing : 16/04/2019 घोषणाक तार ख/Date of Pronouncement : 28/06/2019 आदे श / O R D E R Per Dr. A. L. Saini:

The captioned appeal filed by the Assessee, pertaining to assessment year 2014-15, is directed against the order passed by the Commissioner of Income Tax (Appeal)-1, Kolkata, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (in short the 'Act') dated 19/12/2016.

2. At the time of hearing none appeared on behalf of assessee in spite of issuance of notice for hearing more than one occasion and Ld. Departmental Representative(DR), was present for the appellant Revenue. In the absence of any appearance by the assessee, the appeal is being disposed of ex parte qua the M/s Prime Movers Auto Associates Pvt. Ltd.

Assessment Year:2014-15 assessee, after hearing Ld. DR for the Revenue on merits in terms of Rule 24 of the Income Tax Appellate, Tribunal, Rules, 1963.

3. Grounds of appeal raised by the assessee are as follows:

1. That under the facts and circumstances of the case the ld. CIT(A) erred in passing order ex parte.

2. That under the facts and circumstances of the case, the ld. CIT(A) erred in confirming the disallowance of Rs. 288,653/- in terms of section 14A.

The disallowance is unjustified & needs to be deleted.

3. That the assessee craves leave to add, alter, modify or withdraw any ground or grounds of appeal at the time of hearing.

4. Brief facts qua the issue are that during the assessment proceedings the Assessing Officer made the disallowance u/s 14A read with Rule 8D and made a detailed computation under Rule 8D vide page nos. 2 and 3 of the assessment order, wherein the Assessing Officer made the disallowance u/s 14A read with Rule 8D(2)(ii) and 8D(2)(iii) to the tune of Rs. 288,653/- (Rs. 2,39,153/- + Rs. 49,500/-).

5. Aggrieved by the order of the Assessing Officer the assessee carried the matter in appeal before the Ld. CIT(A) who has confirmed the order made by the Assessing Officer. Aggrieved by the order of Ld. CIT(A) the assessee is in appeal before us.

6. After hearing the ld. DR for the revenue and perusing the judicial decision on the issue, we find that the issue involved in the present appeal is not longer res integra. We note that in this case the assessee has not earned any exempt income. Since the assessee has not earned any exempt income therefore there should not be any disallowance u/s 14A read with Rule 8D of IT Rules. For that we rely on the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Holcin India Pvt.

Pa g e | 2 M/s Prime Movers Auto Associates Pvt. Ltd.

Assessment Year:2014-15 Ltd. in I.T.A. No. 406/2014 wherein it was held that in the absence of any tax free income, the corresponding expenditure could not be worked out for making disallowance under section 14A of the Act. Hon'ble Delhi High Court in the case of Chem Invest vs. CIT in I.T.A. No. 749/2014 order dated 02.09.2015 held that section 14A will not apply if no exempt income is received during the relevant previous year.

Hence relying on the judgment of the Hon'ble Delhi High Court wherein it was held that if there is no exempt income no disallowance should be made u/s 14A read with Rule 8D(2)(ii) of the Act. We note that the assessee's case under consideration after perusing the assessment order we find that there is no exempt income therefore no disallowance is attracted. Hence the appeal of the assessee is allowed.

7. In the result, the appeal of the assessee is allowed.

                Order pronounced in the Court on           28.06.2019



       Sd/-                                    Sd/-
 (S.S.GODARA)                              (A.L.SAINI)
  या यकसद य / JUDICIAL MEMBER              लेखासद य / ACCOUNTANT MEMBER

 दनांक/ Date: 28/06/2019
(SB, Sr.PS)
Copy of the order forwarded to:

1. M/s Prime Movers Auto Associates Pvt. Ltd.

2. DCIT, Circle-1(2), Kolkata

3. C.I.T(A)- 4. C.I.T.- Kolkata.

5. CIT(DR), Kolkata Benches, Kolkata.

6. Guard File.

True copy By Order Assistant Registrar ITAT, Kolkata Benches Pa g e | 3