THE PRINCIPAL COMMISSIONER OF INCOME TAX-4 vs. VIKRAM CAPITAL RESOURCES PVT. LTD.

PDF · subscribers
TAXAP/650/2018HC GujaratGJHC24035696201819 June 2018Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE A.Y. KOGJE3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue was no longer res integra in view of a binding decision of a Division Bench of the same Court in the case of Principal Commissioner of Income-tax-3 v. Nirma Credit & Capital (P.) Ltd. ([2017] 85 taxmann.com 72 (Gujarat)). The Court noted that the assessee had incurred interest expenditure against which it earned taxable interest income, and both the CIT(Appeals) and the ITAT had deleted the disallowance based on this factual matrix. Consequently, the High Court found that no substantial question of law arose in the present appeal. The appeal was accordingly dismissed.

What were the facts?

The Revenue is in appeal against the order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'B', for Assessment Year 2006-2007. The ITAT had dismissed the Revenue's appeal, upholding the order of the CIT(Appeals). The CIT(Appeals) had deleted a disallowance of Rs. 1,04,79,689 made by the Assessing Officer (AO) under Section 14A read with Rule 8D of the Income Tax Act. The assessee, Vikram Capital Resources Pvt. Ltd., had incurred interest expenditure of Rs. 1,47,03,898 and earned taxable interest income of Rs. 1,86,03,752. The Revenue is aggrieved by the deletion of the disallowance.

What were the issues?

1. Whether the Appellate Tribunal is correct in law and on facts in upholding the decision of the CIT(A) in deleting the disallowance of Rs. 1,04,79,689/- under Section 14A read with Rule 8D of the Income Tax Act. Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the fact that the CIT(A) and the ITAT deleted the disallowance implies that the assessee argued successfully that the disallowance was not warranted. Revenue's Contention: The Revenue contended that the disallowance of Rs. 1,04,79,689/- under Section 14A read with Rule 8D was justified. The Revenue relied on the AO's assessment order in making this disallowance.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/650/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 650 of 2018 ================================================================ THE PRINCIPAL COMMISSIONER OF INCOME TAX-4 Versus VIKRAM CAPITAL RESOURCES PVT. LTD. ================================================================ Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE Date : 19/06/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE M.R. SHAH)

1.

Feeling aggrieved and dissatisfied by the impugned judgment and order passed by the learned Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'B', Ahmedabad passed in ITA No.257/Ahd/2015 for the Assessment Year 2006-2007, by which the learned Tribunal has dismissed the said Appeal preferred by the Revenue and confirmed the order passed by the CIT (Appeals),

in deleting

the disallowance

of Rs.1,04,79,689/= under Section 14A read with Rule 8D of the Income Tax Act and Rules, the Revenue has preferred the present Appeal with the proposed question of law :- C/TAXAP/650/2018 ORDER “Whether the Appellate Tribunal is correct in law and on facts in upholding the decision of the CIT(A) in deleting the disallowance of Rs.1,04,79,689/- u/s. 14A r.w.r. 8D of the Act?”

2.

Heard learned Advocate Mrs. M.M. Bhatt appearing on behalf of the Revenue.

3.

We have considered in detail the impugned order passed by the learned Tribunal as well as the order passed by the CIT(A) deleting the disallowance of Rs.1,04,79,689/= under Section 14A read with Rule 8D of the Income Tax Act and Rules.

4.

At the outset, it is required to be noted that the assessee incurred the interest expenditure of Rs.1,47,03,898/= against which the assessee earned a taxable interest income of Rs.1,86,03,752/=. Therefore, learned CIT(A) as well as the learned Tribunal deleted the disallowance of Rs.1,04,79,689/= made by the AO under Section 14A read with Rule 8D of the Income Tax Act and Rules. The issue involved in the present Appeal is squarely covered against the Revenue in view of the decision of the Division Bench of this Court in the case of Principal C/TAXAP/650/2018 ORDER Commissioner of Income-tax-3 v. Nirma Credit & Capital (P.) Ltd. reported in [2017] 85 taxmann.com 72 (Gujarat).

5.

Under the circumstances, the issue is now not res integra in view of the binding decision of the Division Bench of this Court. In view of the above and for the aforestated reasons, and in view of the decision of this Court in the case of Principal Commissioner of Income-tax-3 (supra), no substantial question of law arises in the present Appeal and therefore, the present Appeal deserves to be dismissed and is accordingly dismissed. (M.R. SHAH, J) (A.Y. KOGJE, J) CAROLINE

More judgments on Section 14A

All 15,875 judgments and leading authorities on Section 14A →

Recent GST High Court judgments

Search GST case law →