DY. COMMISSIONER OF INCOME TAX, CIRCLE-1(2), HYDERABAD vs. CYIENT LIMITED, HYDERABAD

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ITA 1588/HYD/2019Status: DisposedITAT Hyderabad28 May 2021AY 2016-172 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 upheld the CIT(A)'s decision, stating that disallowance under Section 14A should only be computed on investments yielding exempt income. This principle has been settled by various High Court decisions.

What were the facts?

The Revenue appealed against the CIT(A)'s order which restricted the disallowance under Section 14A read with Rule 8D to only those investments that yielded exempt income. This was based on a previous tribunal order in the assessee's own case.

What were the issues?

Whether disallowance under Section 14A should be made on the entire investment or only on investments yielding exempt income.

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 BENCHES : BENCH “B” HYDERABAD

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

Hearing: 18/03/2021Pronounced: 28/05/2021

For Revenue: Shri Rohit Mujumdar, D.R. For Assessee: Shri Pawan Kumar Chakrapani, AR Date of Hearing : 18/03/2021 Date of Pronouncement : 28/05/2021 O R D E R PER S.S. GODARA, J.M. This Revenue’s appeal for AY 2016-17 arises from CIT(A)-1 Hyderabad’s order dated 27.08.2019 passed in case no. 10412/2018-19 involving proceedings u/s 143(3) of the Income Tax Act, 1961 for short ‘the Act’.

Heard both the parties. Case file perused.

2.

The Revenue’s sole substantive grievance raised in the instant appeal challenges correctness of the CIT(A)’s order restricting 14A rw Rule 8D disallowance of Rs.1,79,22,911/- to the extent of asssessee’s investments relating to exempt income only as per tribunal’s order in ITA 1462/H/17 for 1 AY 2015-16 in assessee’s own case itself. There has been no illegality or irregularity pointed out from the revenue side in so far as correctness of CIT(A)’s findings in principle are concerned. Hon’ble Calcutta high court’s decision in CIT vs. REI Agro Pvt. Ltd. GA 3022 of 2013 ITAT 1611/2013 dt. 23.12.2013 has already settled the issue that only the exempt income yielding investments have to be considered in computing the impugned disallowance than entire sums thereof. We thus decline Revenue’s instant sole substantive grievance for this precise reason alone. 4. This Revenue’s appeal is dismissed.

Pronounced in Open Court on 28th May, 2021.

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