PR. COMMISSIONER OF INCOME TAX -4, NEW DELHI vs. INNUS INFRASTRUCTURE PVT. LTD.

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ITA/1328/2018HC DelhiDLHC01411989201827 November 2018Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue raised in the appeal, pertaining to disallowance under Section 14A of the Income Tax Act, 1961, read with Rule 8D of the Income Tax Rules, 1962, was covered against the Revenue by several decisions of the High Court. The latest of these was ITA No. 725/2018, Principal Commissioner of Income Tax-6 New Delhi versus Macdonald’s India Private Limited, dated 22nd October, 2018. In view of this established legal position and the factual context, the Court concluded that no substantial question of law arose in the present appeal. Consequently, the appeal filed by the Revenue was dismissed. No specific finding was made on the merits of the disallowance itself, as the appeal was dismissed on the ground of being covered by precedent.

What were the facts?

The appeal by the Principal Commissioner of Income Tax - 4, New Delhi (Revenue) challenges an order concerning Assessment Year 2013-14. The assessee, Innus Infrastructure Private Limited, earned exempt dividend income of Rs. 5,13,581/-. The assessee voluntarily disallowed Rs. 5,61,464/- under Section 14A of the Income Tax Act, 1961. However, the Assessing Officer invoked Rule 8D of the Income Tax Rules, 1962, to enhance the disallowance to Rs. 2,63,55,878/-. The High Court was considering whether a substantial question of law arose from this enhancement.

What were the issues?

1. Whether the High Court should entertain an appeal by the Revenue when the issue of disallowance under Section 14A read with Rule 8D is covered against the Revenue by multiple High Court decisions. Assessee's Contention: The judgment does not record any specific contentions made by the assessee. However, the court's decision implies that the assessee would have relied on existing precedents. Revenue's Contention: The Revenue's appeal was based on the disallowance made by the Assessing Officer under Section 14A read with Rule 8D. The Revenue likely sought to argue for the validity of the enhanced disallowance, despite contrary precedents.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

$~37 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1328/2018

PR. COMMISSIONER OF INCOME TAX -4, NEW DELHI ..... Appellant

Through: Mr. Asheesh Jain, Sr. Standing Counsel.

versus

INNUS INFRASTRUCTURE PVT. LTD. ..... Respondent

Through:

CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI

O R D E R %

27.11.2018

Issue raised in this appeal pertains to disallowance under Section 14A of the Income Tax Act, 1961 (Act, for short) read with Rule 8D of the Income Tax Rules, 1962. 2. Innus Infrastructure Private Limited during the period relevant to Assessment Year 2013-14 had earned exempt dividend of Rs.5,13,581/-. The assessee had themselves disallowed an amount of Rs. 5,61,464/- under Section 14A of the Act. 3. The Assessing Officer, however, invoked Rule 8D to enhance the disallowance to Rs.2,63,55,878/-. 4. The issue raised by the Revenue is covered against them by several decisions of this Court, the latest being ITA No. 725/2018, Principal Commissioner of Income Tax-6 New Delhi versus Macdonald’s India

Private Limited dated 22nd October, 2018. In view of the aforesaid factual and legal position, no substantial question of law arises in the present appeal and the same is dismissed.

SANJIV KHANNA, J.

ANUP JAIRAM BHAMBHANI, J. NOVEMBER 27, 2018 MR/VKR

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