PRINCIPAL COMMISSIONER OF INCOME TAX 1 vs. ADANI WILMAR LTD.

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TAXAP/355/2020HC GujaratGJHC24052857202018 December 2020Bench: HONOURABLE MR. JUSTICE J.B.PARDIWALA,HONOURABLE MR. JUSTICE ILESH J. VORA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Tax Appeal filed by the Revenue. The Court noted that it had previously passed an order in Tax Appeal No. 247 of 2020, dated 01.10.2020, concerning the very same assessee, Adani Wilmar Ltd. In that prior decision, the Court had addressed similar questions of law. Given that the issues raised in the present appeal were no longer res integra (i.e., already decided), the Court found no reason to entertain the appeal. Therefore, the appeal was dismissed based on the precedent set by its earlier judgment in the case of the same assessee. The specific reasoning of the ITAT regarding the restriction of disallowance to Rs. 2,64,500/- or the principle that disallowance cannot exceed exempt income was not elaborated upon by the High Court, as it relied on its prior decision.

What were the facts?

The Revenue, Principal Commissioner of Income Tax 1, has filed this Tax Appeal under Section 260A of the Income Tax Act, 1961, against an order dated 04.03.2020 passed by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench (D). The appeal pertains to Assessment Year 2013-14 and concerns ITA No. 1947/Ahd/2017. The dispute involves an addition made on account of disallowance under Section 14A read with Rule 8D of the Act. The amount in dispute is Rs. 7,72,41,277/-, which the Tribunal had restricted. The procedural history relevant is the ITAT's order being challenged by the Revenue.

What were the issues?

1. Whether the Appellate Tribunal has erred in law and on facts in restricting the addition of Rs. 7,72,41,277/- to Rs. 2,64,500/- made on account of disallowance under Section 14A read with Rule 8D of the Act? (Question of law and fact, concerning Section 14A and Rule 8D). Assessee's Contention: The judgment does not record specific contentions made by the assessee. Revenue's Contention: The Revenue argues that the ITAT erred in restricting the disallowance to Rs. 2,64,500/- from the proposed Rs. 7,72,41,277/-. 2. Whether the Appellate Tribunal is correct in holding that disallowance made under Section 14A read with Rule 8D cannot exceed exempt income? (Question of law, concerning Section 14A and Rule 8D). Assessee's Contention: The judgment does not record specific contentions made by the assessee. Revenue's Contention: The Revenue argues that the ITAT's holding that disallowance under Section 14A read with Rule 8D cannot exceed exempt income is incorrect.

Which sections of the Income-tax Act were involved?

Section 260A,Section 14A

AI-generated summary — verify with the full judgment below

C/TAXAP/355/2020 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 355 of 2020 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 1 Versus ADANI WILMAR LTD. ========================================================== Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 MR B S SOPARKAR(6851) for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE ILESH J. VORA

Date : 18/12/2020

ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. This Tax Appeal under Section 260A of the Income Tax, 1961, at the instance of the Revenue and is directed against the order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench, (D), dated 04.03.2020 in ITA No. 1947/Ahd/2017 for A.Yr.: 2013-14. 2. The Revenue has proposed following two questions of law for the consideration of this Court. (A) Whether the Appellate Tribunal has erred in law and on facts in restricting the addition of Rs.7,72,41,277/- to Rs.2,64,500/- made on account of disallowance u/s. 14A r.w. Rule 8D of the Act? (B) Whether the Appellate Tribunal is correct in holding that dis-allowance made u/s 14A r.w. Rule 8D cannot exceed Page 1 of 2

C/TAXAP/355/2020 ORDER exempt income? 3. We have heard Ms. Mauna Bhatt, the learned Senior Standing Counsel for the Revenue and Mr. Bandish Soparkar, the learned counsel appearing for the respondent – assessee on caveat.

4.

Having regard to the order passed in the Tax Appeal No. 247 of 2020 by this Court dated 01.10.2020 in the matter of very same assessee, this appeal is dismissed, as the questions as proposed are no longer res-intigra. (J. B. PARDIWALA, J) (ILESH J. VORA,J) A. B. VAGHELA/suchit Page 2 of 2

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