PR. COMMISSIONER OF INCOME TAX-IV vs. INDUS VALLEY INVESTMENT & FINANCE P. LTD.

ITA/938/2015HC DelhiDLHC01564248201513 April 2017Bench: CASES PERTAINING TO SPL.DIVISION BENCHES2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT was right in concluding that the restriction of the disallowance should not exceed the exempt income. The Court noted that the total exempt income was Rs. 25,38,020. After accounting for the Rs. 7.36 lakhs disallowance voluntarily offered by the assessee, the ITAT restricted the disallowance to Rs. 18,01,968. This restriction was made following the High Court's decision in CIT v. Holcim India Pvt. Ltd. (2014) 90 CCH 08I-DEL-HC. The Court found that the decision in Principal Commissioner of Income Tax v. Bharti Oversees Pvt. Ltd. would not apply to the facts of the present case, as the assessee's sole business is investments. The Court concluded that no substantial question of law arose. The appeal was dismissed.

What were the facts?

The Revenue, represented by the Pr. Commissioner of Income Tax-IV, appealed against an order of the Income Tax Appellate Tribunal (ITAT). The assessee is Indus Valley Investment & Finance Pvt. Ltd. The appeal concerns assessment year(s) not explicitly stated. The ITAT had restricted a disallowance made by the Revenue. The assessee is engaged solely in the business of investments. The ITAT noted that the total exempt income was Rs. 25,38,020. The assessee had voluntarily offered a disallowance of Rs. 7.36 lakhs. The ITAT restricted the disallowance to Rs. 18,01,968, following a High Court decision.

What were the issues?

1. Whether the ITAT was right in concluding that the restriction of the disallowance should not exceed the exempt income, considering the assessee's business is solely investments? (Question of law/mixed law and fact, concerning disallowance of expenses related to exempt income). Assessee's contention: The decision of the High Court in Principal Commissioner of Income Tax v. Bharti Oversees Pvt. Ltd. 237 Taxman 417 (Del.) will not apply as the assessee's only business is investments. Revenue's contention: Not recorded in the judgment. However, the Revenue is the appellant, implying disagreement with the ITAT's decision.

AI-generated summary — verify with the full judgment below

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 1. +

ITA 938/2015

PR. COMMISSIONER OF INCOME TAX-IV ..... Appellant Through: Mr. Rahul Chaudhary, Senior Standing Counsel with Ms. Lakshmi Gurung, Advocate.

versus

INDUS VALLEY INVESTMENT & FINANCE P. LTD.

..... Respondent Through: Mr. Deepak Chopra, Mr. Harpreet Singh Ajmani, Mr. Rohan Khare and Mr. Manu Giri, Advocates.

CORAM: JUSTICE S. MURALIDHAR JUSTICE NAJMI WAZIRI

O R D E R %

13.04.2017

Mr. Deepak Chopra, learned counsel appearing for the Respondent states that the decision of this Court in Principal Commissioner of Income Tax v. Bharti Oversees Pvt. Ltd. 237 Taxman 417 (Del.) will not apply in the facts of the present case since the only business of the Assessee is that of the investments. This is unable to be disputed b Mr Rahul Chaudhary, Senior Standing Counsel for the Revenue.

Consequently, the ITAT was right in concluding that the restriction of the disallowance should not exceed the exempt income. It was noted that the total exempt income in the present case was Rs.25,38,020. After accounting ITA 938/2015

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for the disallowance of Rs.7.36 lakhs voluntarily offered by the Assessee, the ITAT restricted the disallowance to Rs.18,01,968 following the decision of this Court in CIT v. Holcim India Pvt. Ltd. (2014) 90 CCH 08I-DEL- HC.

No substantial question of law arises.

The appeal is dismissed.

S. MURALIDHAR, J.

NAJMI WAZIRI, J. APRIL 13, 2017 dn

ITA 938/2015

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