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

C/TAXAP/807/2019 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 807 of 2019 ================================================================ THE PRINCIPAL COMMISSIONER OF INCOME TAX-1 Versus ADANI WILMAR LTD. ================================================================ Appearance: MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA

Date : 13/01/2020

ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. This tax appeal filed under Section 260A of the Income Tax Act, 1961 (for short “the Act, 1961”) is at the instance of the Revenue and is directed against the order dated 15th May, 2019 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench “B” in the ITA No.2210/Ahd/2017 for the A.Y.2014-15. 2. The Revenue has proposed the following question as the substantial question of law arising for the determination of this Court; “Whether Appellate Tribunal has erred in law and on facts in deleting the disallowance of Rs.9,11,32,805/- u/s.14A of the Act?” Page 1 of 4

C/TAXAP/807/2019 ORDER 3. The Assessee had filed its return of income on 28th November, 2013 at Rs.1,25,71,480/-. The Assessing Officer passed an assessment order under Section 143(3) of the Act by making a disallowance under Section 14A read with Rule 8D of the Income Tax Rules, 1962 in respect of the expenditures incurred for the investment made by the respondent- assessee. 4. Being dissatisfied, the assessee filed an appeal before the CIT (A), seeking to delete the disallowance made by the Assessing Officer by placing reliance on the decision of this Court in the case of CIT vs. Corrtech Energy Ltd., reported in (2014) 45 taxmann.com 116. The CIT (A) partly allowed the appeal of the assessee by deleting the disallowance made by the Assessing Officer under Section 14A of the Act, 1961. 5. Being dissatisfied with the order passed by the CIT (A), the Revenue preferred an appeal before the Income Tax Appellate Tribunal. The Tribunal, by the impugned order, dismissed the appeal preferred by the Revenue holding as under; “5. We have heard both the issues and perused the material on record carefully. We have noticed that it is undisputed fact that assessee has not earned by exempt income during the year under consideration. Vide a number of judicial pronouncements the Co-ordinate Benches of the ITAT Ahmedabad have held that no disallowance shall be made under section 14A of the Act if the assessee has not earned any exempt income otherwise the disallowance shall be restricted to the exempt income. Section 14A(1) provides that for the purpose of computing total income under chapter IV, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which Page 2 of 4

C/TAXAP/807/2019 ORDER does not form part of other total income under the act. We have noticed that Id. CIT(A) has followed the decision of the Co-ordinate Bench of the ITAT in the case of Shah Alloys Ltd. (2315/Ahd/2010 dated 27-03-2015 and the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Corretech Energy Pvt. Ltd. (45 Taxmann.com 116) an identical issue of disallowance u/s. 14A when no dividend income is earned by the assessee. The judicial findings of the Hon'ble jurisdictional High Court and the decision of the Co-ordinate Bench of the ITAT have been elaborated in the decision of the Ld. CIT(A) vide which similar issue an identical facts have been decided in favour of the assessee. We have also perused the judicial pronouncement in the case of CIT v Corrtech Energy (p) Ltd (2014) 45 taxmann.com.116 of Hon'ble High Court of Gujarat wherein it is held that in a case assessee did not make any claim for exemption of any income from payment of taxes, in that case disallowance u/s 14A of the act could not be made. It is crystal clear that the jurisdictional High Court‘ has decided that to attract the provision of section 14A it is required that assessee should have earned an exempt income, if the assessee has not earned an exempt income and not claimed so in the return of income then. the provision of section 14A are not applicable. We find that during the year under consideration the assessee company has not earned any exempt income and has not claimed any such exempt income in the return of income therefore as per our considered opinion the provision of section 14A are not applicable. In view of the above mentioned facts and circumstances and fellowing the decision of the Hon'ble jurisdictional High Court of Gujarat, we consider that the disallowance u/s. 14A r.w.s Rule 8D cannot be made as the assessee has not earned any exempt income. Accordingly, the appeal of the Revenue is dismissed.” 6. As the CIT (A) as well as the Appellate Tribunal both have given a concurrent finding of fact relying upon the ratio laid down by this Court in the case of Corrtech Energy Ltd. (supra), no question of law much less the substantial question of law Page 3 of 4

C/TAXAP/807/2019 ORDER arises in the present appeal. The appeal is, accordingly, dismissed with no order as to costs. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) Vahid Page 4 of 4