DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE2-(1), HYDERABAD vs. COROMANDEL INTERNATIONAL LIMITED, SECUNDERABAD

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ITA 764/HYD/2020Status: DisposedITAT Hyderabad29 October 2021AY 2013-148 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that restricting the disallowance under Section 14A read with Rule 8D to the extent of dividend-yielding investments is a settled position of law. Therefore, the CIT(A) was correct in directing the Assessing Officer to recompute the disallowance accordingly.

What were the facts?

The Revenue appealed against the CIT(A)'s order which directed the Assessing Officer to consider only dividend-yielding investments for computing disallowance under Section 14A read with Rule 8D. The disallowance was for assessment years 2013-14 and 2014-15.

What were the issues?

Whether disallowance under Section 14A read with Rule 8D should be computed on all investments or only on dividend-yielding investments.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD ‘B’ BENCH, HYDERABAD.

Before: SHRI S.S. GODARA & SHRI L. P. SAHU

For Appellant: Shri Y.V.S.T. Sai (D.R)

Dy. Commissioner of Income Tax, Circle 2(1), Hyderabad. …..Appellant. Vs. M/s. Coromandel International Limited, Secunderabad. PAN AAACC7852K …..Respondent. Appellant By : Shri Y.V.S.T. Sai (D.R) Respondent By : Shri S.P. Chidambaram. (A.R.) Date of Hearing : 18.10.2021. Date of Pronouncement : 29.10.2021. O R D E R Per Shri S.S. Godara, J.M. : These Revenue’s twin appeals for Assessment Years 2013-14 and 2014-15 arise against the CIT(A)-2, Hyderabad’s separate orders; both dt.22.09.2020 passed in case Nos.10517/2016-17/CIT(A)-2 and 10378/2016- 17/CIT(A)-2 involving proceedings u/s.143(3) r.w.s. 92CA(4) of the Income Tax Act, 1961 ('the Act'); respectively.

2 & 765/Hyd/2020 Heard both the parties. Case files perused.

2.

The Revenue’s identical sole substantive grievance in both these appeals seeks to revive the Assessing Officer’s action making 14A r.w. Rule 8D disallowance(s) of Rs.15,80,59,828 and Rs.16,00,01,852; assessment year- wise respectively. Its case is that CIT(A) orders under challenge have erred in law and on facts in directing the Assessing Officer to consider only the dividend yielding investments for the purpose of computing the impugned disallowance as under :

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3.

We find no merit in the Revenue’s instant sole substantive grievance as this issue of restricting 14A r.w. Rule 8D disallowance only to the extent of exempt income yielding investment is no more res integra in light of REI 7 & 765/Hyd/2020 Agro Limited Vs. DCIT GA No.3581 of 2013 ITAT No.220/Kol/2013 dt.9.4.2014 (Cal.) and (2015) 61 taxman.com 71 (Del) ACB India Limited Vs. ACIT rejecting the Revenue’s identical contention seeking 14A r.w. Rule 8D that the same is to be computed on the entire investments We hold in this factual backdrop that the CIT(A) has rightly directed the Assessing Officer to recompute the impugned disallowance under challenge. The Revenue fails in its identical sole substantive ground. No other ground has been pressed before us.

4.

These Revenue’s twin appeals are dismissed. A copy of this common order be placed in respective case files.

Order pronounced in the open court on 29th Oct., 2021.

Sd/- Sd/- (L.P. SAHU) (S.S. GODARA) Accountant Member Judicial Member Hyderabad, Dt. 29.10.2021. * Reddy gp 8 & 765/Hyd/2020 Copy to :

1. 1. M/s. Coromandel International Limited, 1-2-10, Coromandel House, S.P. Road, Secunderabad-500 003 2. DCIT, Circle 2(1), Hyderabad.

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