MEDHA SERVO DRIVES PRIVATE LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4), HYDERABAD

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ITA 438/HYD/2020Status: DisposedITAT Hyderabad22 October 2021AY 2012-134 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance for AY 2012-13 was not sustainable as it was made without incriminating material and was a double addition. For AY 2014-15, the disallowance was deleted based on a co-ordinate bench decision and case law, as the assessee had not derived any exempt income.

What were the facts?

The assessee appealed against disallowances made under Section 14A read with Rule 8D for AY 2012-13 and AY 2014-15. The disallowance for AY 2012-13 was made in a Section 153A assessment, which was already made in the regular assessment.

What were the issues?

Whether disallowance under Section 14A r.w. Rule 8D is sustainable when it is a double addition or when no exempt income is earned.

Which sections of the Income-tax Act were involved?

Section 14A,Section 153A,Section 143(3),Section 263,Section 115JB

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

PER S.S.GODARA, J.M. : These assessee’s three appeals 439 & 440/Hyd/2020 arise against the CIT(A)-11, Hyderabad’s separate orders; dated 25-02-2020 passed in case Nos.10074, 10019 & 10076 / 2019-20 / CIT(A)-11 / Hyd / 2019-20, involving proceedings u/s.143(3) r.w.s.153A in AY.2012-13 and u/s.143(3) r.w.s.263 and u/s.143(3) r.w.s.153A of the Income Tax Act, 1961 [in short, ‘the Act’] in the latter twin cases pertaining to AY.2014-15; respectively. Heard both the parties. Case files perused.

:- 2 -: 439 & 440/Hyd/2020

2.

We notice at the outset with the able assistance of both the parties that the assessee’s identical sole substantive grievance herein seeks to reverse both the lower authorities’ action making Section 14A r.w.Rule 8D disallowance of Rs.6,82,685/- in AY.2012-13 and Rs.9,61,911/- each in latter twin appeals for AY.2014-15; respectively.

3.

Suffice to say, it transpires at the outset that the instant identical issue is no more res integra in all these cases for the precise reason that the Assessing Officer’s regular assessment in AY.2012-13 framed on 31-03-2015 had already made the very disallowance which is an instance of double addition therefore. We further observe that the CIT(A)’s order in AY.2012-13’s appeal has not adjudicated the instant issue on merits. We therefore hold that the impugned addition made in Section 143(3) r.w.s.153A assessment is not liable to be sustained since not based on any incriminating material and the same had already been made in Section 143(3) assessment. We therefore accept the assessee’s grievance herein. Its former appeal succeeds therefore.

4.

The outcome is no different in assessee’s latter twin appeal & 440/Hyd/2020 pertaining to AY.2014- 15 as well since this tribunal’s co-ordinate bench decision in its C.O.No.23/Hyd/2018 filed in Revenue’s appeal No.655/2018 involving Section 143(3) assessment challenging the very disallowance stood accepted on the ground that it had not derived any exempt income. We therefore adopt the :- 3 -: 439 & 440/Hyd/2020 very precise reason herein as well to delete the impugned disallowance in light of case law – i. CIT Vs. Chettinad Logistics Pvt. Ltd., [80 taxmann.com 221] (Madras); ii. CIT Vs. Corrtech Energy Pvt. Ltd., [223 Taxman 130] (Guj); iii. Cheminvest Ltd., Vs. CIT (2015) [378 ITR 33] (Del)

1.

The impugned disallowance of Rs.9,61,911/- each in both these consequential round appeals stands deleted therefore. These main appeals & 440/Hyd/2020 are accepted. The very outcome of to follow regarding applicability of Section 115JB MAT provision(s) qua the impugned disallowance as well.

5.

These assessee’s three appeals are allowed in above terms. A copy of this common order be placed in the respective case files.

Order pronounced in the open court on 22nd October, 2021

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