THE PR. COMMISSIONER OF INCOME TAX -6 vs. MMTC LTD.

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ITA/1071/2017HC DelhiDLHC01454685201728 November 2017Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE SANJEEV SACHDEVA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arose for consideration in the appeal. The Court noted that it had previously declined to frame a question of law on the issue of Section 14A for the same assessee in an appeal pertaining to a different assessment year (Principal Commissioner of Income Tax v. MMTC Ltd., ITA No.730/2017 decided on 12.09.2017). The Court also referred to its own judgment in SIL Investment Ltd. v. Addl. Commissioner of Income Tax and the Bombay High Court's judgment in Godrej & Boyce Manufacturing Co. Ltd., Mumbai v. Deputy Commissioner of Income Tax. Based on the lack of a substantial question of law and the precedent set in similar cases involving the same assessee, the Court dismissed the appeal. No specific findings were made on the merits of the disallowance itself, as the appeal was disposed of on the preliminary ground of no substantial question of law.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax -6, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order concerning the assessee, MMTC Ltd. The dispute pertains to a disallowance made by the Assessing Officer (AO) under Section 14A of the Act, amounting to ₹3,45,20,401/-. The AO had applied Rule 8D of the Income Tax Rules, 1982, in making this disallowance. The High Court noted that similar issues had been decided in previous judgments, including Godrej & Boyce Manufacturing Co. Ltd. v. Deputy Commissioner of Income Tax and SIL Investment Ltd. v. Addl. Commissioner of Income Tax. Furthermore, for another assessment year concerning the same assessee, the High Court had previously declined to frame a question of law on the issue of Section 14A.

What were the issues?

1. Whether a substantial question of law arises for consideration in the appeal filed by the Revenue concerning the disallowance made under Section 14A of the Income Tax Act, 1961, read with Rule 8D of the Income Tax Rules, 1982. The Revenue contended that the disallowance made by the AO under Section 14A, applying Rule 8D, was justified. The Revenue likely argued that the assessee had incurred expenditure that could be attributed to earning tax-exempt income, and therefore, a disallowance was warranted. The Revenue relied on the AO's assessment order and the application of Rule 8D. The judgment does not explicitly record the Revenue's detailed arguments beyond the fact that they are in appeal against the disallowance. The Assessee's contentions are not recorded in the judgment, other than the fact that the High Court had previously declined to frame a question of law on the same issue for a different assessment year concerning the same assessee.

Which sections of the Income-tax Act were involved?

Section 260A,Section 14A

AI-generated summary — verify with the full judgment below

ITA No.1071/2017 Page 1

$~35 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 1071/2017

THE PR. COMMISSIONER OF INCOME TAX -6 ..... Appellant Through: Mr. Ruchir Bhatia with Mr. Puneet Rai & Mr. Gaurav Khetarpal, Advs.

versus

MMTC LTD.

..... Respondent Through: Ms. Kavita Jha with Mr. Vaibhav Kulkarni, Advs.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE SANJEEV SACHDEVA

O R D E R %

28.11.2017

1.

The Revenue is in appeal under Section 260A of the Income Tax Act, 1961 with respect to the disallowance under Section 14A – made by the AO in the sum of `3,45,20,401/-. The AO had applied Rule 8D of the Income Tax Rules, 1982. 2. This Court notices that the judgment in Godrej & Boyce Manufacturing Co. Ltd., Mumbai v. Deputy Commissioner of Income Tax 328 ITR 81 (Bom) and that of this Court in SIL Investment Ltd. v. Addl. Commissioner of Income Tax 148 TTJ 213 (Del) was applied. Furthermore, for another assessment

ITA No.1071/2017 Page 2

year concerning the same assessee (MMTC Ltd.), this Court had declined framing question of law on the issue of Section 14A, as in the present case; Principal Commissioner of Income Tax v. MMTC Ltd. (ITA No.730/2017 decided on 12.09.2017). 3. As a consequence, no question of law arises. The appeal is, therefore, dismissed.

S. RAVINDRA BHAT, J

SANJEEV SACHDEVA, J NOVEMBER 28, 2017 kks

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