THE PR. COMMISSIONER OF INCOME TAX -4 vs. INDIABULLS FINANCIAL SERVICES LTD.

PDF · subscribers
ITA/546/2016HC DelhiDLHC01167510201602 May 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE CHANDER SHEKHAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court declined to frame a question of law. It applied the rule of consistency, as reiterated by the Supreme Court in Commissioner of Income Tax v. Excel Industries Ltd. (2013) 358 ITR 295 (SC). The Court noted the Assessee's submission that the ITAT had followed its own order for a prior AY and that for subsequent AYs, the AO had accepted the Assessee's claim regarding interest expenditure not being relatable to exempt income, with those orders attaining finality. Based on the principle of consistency, the Court found no grounds to interfere with the ITAT's order. Consequently, the appeal filed by the Revenue was dismissed.

What were the facts?

The Revenue, Pr. Commissioner of Income Tax-4, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated January 13, 2016, passed by the Income Tax Appellate Tribunal (ITAT). The ITAT's order was in relation to ITA No. 4192/DEL/2012 for Assessment Year 2008-09. The dispute concerns the deletion of an addition of proportionate interest expenditure made by the Assessing Officer (AO) under Section 14A read with Rule 8D(2)(ii) of the Act. The Assessee, Indiabulls Financial Services Ltd., pointed out that the ITAT followed its own prior order for AY 2009-10. Furthermore, for AYs 2010-11, 2011-12, and 2012-13, the AO accepted the Assessee's claim regarding interest expenditure not being relatable to exempt income, and these orders attained finality.

What were the issues?

1. Whether the ITAT erred in deleting the addition of proportionate interest expenditure under Section 14A read with Rule 8D(2)(ii) of the Income Tax Act, 1961, in the circumstances of the case? Assessee's Contentions: The Assessee argued that the ITAT's impugned order followed its own prior decision for the Assessment Year 2009-10. Additionally, the Assessee highlighted that for subsequent Assessment Years (2010-11, 2011-12, and 2012-13), the Assessing Officer accepted the Assessee's position that the interest expenditure claimed was not relatable to exempt income, and these AO orders had attained finality. The Assessee relied on the principle of consistency as reiterated by the Supreme Court in Commissioner of Income Tax v. Excel Industries Ltd. (2013) 358 ITR 295 (SC). Revenue's Contentions: The Revenue's primary contention, as indicated by the question urged, was that the ITAT erred in deleting the addition of proportionate interest expenditure. No specific authorities, circulars, or precedents were explicitly mentioned by the Revenue in the provided text.

Which sections of the Income-tax Act were involved?

Section 260A,Section 14A

AI-generated summary — verify with the full judgment below

ITA 546/2016 Page 1 of 2 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 18 + ITA 546/2016 THE PR. COMMISSIONER OF INCOME TAX -4 ..... Appellant Through: Mr. Ruchir Bhatia and Mr. Puneet Rai, Advocate versus INDIABULLS FINANCIAL SERVICES LTD. ..... Respondent Through: Mr. Gautam Jain, Mr. Shaantanu Jain, Mr. Madhur Aggarwal, Advocates CORAM: JUSTICE S.MURALIDHAR JUSTICE CHANDER SHEKHAR O R D E R % 02.05.2017 1. The short question urged by the Revenue in this appeal under Section 260A of the Income Tax Act, 1961 (‘Act’) against the order dated 13th January, 2016, passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 4192/DEL/2012 for the Assessment Year (‘AY’) 2008-09 is whether the ITAT erred in the circumstances of the case in deleting the addition of proportionate interest expenditure u/s 14A r/w Rule 8D(2)(ii) of the Act? 2. It is pointed out by learned counsel for the Assessee at the outset that in the impugned order, the ITAT has followed its order for the AY 2009-10 in the Assessee’s own case. Additionally, he points out that for the AYs 2010-

ITA 546/2016 Page 2 of 2 11, 2011-12 and 2012-13, the Assessment Officer (‘AO’) did not disallow the interest expenditure as claimed by the Assessee. In other words, the Assessee’s contention that the interest expenditure claimed was not relatable to the exempt income was accepted by the AO himself. The said orders of the AO for those AYs as far as the said issue is concerned have attained finality. 3. Applying the rule of consistency as reiterated by the Supreme Court in Commissioner of Income Tax v. Excel Industries Ltd. (2013) 358 ITR 295 (SC), the Court declines to frame a question of law. 4. The appeal is, accordingly, dismissed. S.MURALIDHAR, J CHANDER SHEKHAR, J MAY 02, 2017 b

More judgments on Section 14A

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

Recent GST High Court judgments

Search GST case law →