PR. COMMISSIONER OF INCOME TAX (CENTRAL)-2 vs. M/S BHARAT HOTELS LTD.

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ITA/266/2023HC DelhiDLHC01017269202309 May 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA3 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court held that no substantial question of law arises for consideration in the present appeal. The Court noted that the appellant/revenue conceded that the issue was covered by several judgments, including Cheminvest Ltd. v. CIT (2015) 378 ITR 33, CIT v. M/s Chettinad Logistics Pvt. Ltd. [2017] 80 taxmann.com 221 (Madras), and a recent judgment of the same court in ITA 250/2023. The Court further observed that the Supreme Court had dismissed the SLP in the Chettinad Logistics case. Based on this concession and the existing judicial pronouncements, the High Court found no merit in the revenue's appeal. Consequently, the appeal was closed without delving into the merits of the disallowance deletion by the Tribunal.

What were the facts?

The Pr. Commissioner of Income Tax (Central)-2 (the appellant/revenue) filed an appeal before the Delhi High Court challenging an order dated 30.08.2022 passed by the Income Tax Appellate Tribunal (Tribunal). The appeal pertains to Assessment Year 2016-17. The revenue sought to assail the Tribunal's decision to delete a disallowance of Rs.5,75,90,145/- made under Section 14A of the Income Tax Act, 1961. This deletion was made despite the assessee, M/s Bharat Hotels Ltd. (the respondent/assessee), not having earned any exempt income. The revenue's application for condonation of delay in re-filing the appeal was allowed, with the assessee not opposing the prayer.

What were the issues?

1. Whether the Tribunal was correct in deleting the disallowance of Rs.5,75,90,145/- under Section 14A of the Income Tax Act, 1961, considering that the respondent/assessee had not earned any exempt income? (Question of law) Assessee's Contentions: The judgment does not record any specific contentions made by the assessee's counsel, Ms. Ananya Kapoor, regarding the merits of the appeal. However, she did not oppose the revenue's application for condonation of delay. Revenue's Contentions: The appellant/revenue, represented by Mr. Sanjay Kumar, Sr. Standing Counsel, argued that the Tribunal was wrong in deleting the disallowance. The revenue relied on the fact that the disallowance was made under Section 14A. Mr. Kumar conceded that the issue was covered by certain judgments, including Cheminvest Ltd. v. CIT and CIT v. M/s Chettinad Logistics Pvt. Ltd., and a recent judgment of the Delhi High Court in ITA 250/2023.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

ITA No.266/2023 Page 1 of 3

$~38 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of Decision: 09.05.2023

+ ITA 266/2023

PR. COMMISSIONER OF INCOME TAX (CENTRAL)-2

..... Appellant Through: Mr Sanjay Kumar, Sr Standing Counsel with Ms Hemlata Rawat and Ms Easha Kadian, Advs.

versus

M/S BHARAT HOTELS LTD.

..... Respondent Through: Ms Ananya Kapoor with Mr Sumit Lalchandani, Advs.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MR. JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J. (Oral): CM Appl.23547/2023 1. Allowed, subject to just exceptions. CM Appl.23548/2023 2. This is an application filed on behalf of the appellant/revenue seeking condonation of delay in re-filing the appeal. 2.1 According to the appellant/revenue, the period of delay involved is 60 days.

Digitally Signed By:ATUL JAIN Signing Date:20.06.2023 16:23:16 Signature Not Verified

ITA No.266/2023 Page 2 of 3

3.

Ms Ananya Kapoor, who appears on behalf of the respondent/assessee, says that she does not oppose the prayer made in the application. 4. The delay is, accordingly, condoned. 5. The application is disposed of in the aforesaid terms. ITA 266/2023 6. This appeal concerns Assessment Year (AY) 2016-17. 7. The appellant/revenue seeks to assail the order dated 30.08.2022 passed by the Income Tax Appellate Tribunal [in short, “Tribunal”]. 8. The only issue which arises for consideration is, whether the Tribunal was right in deleting the disallowance amounting to Rs.5,75,90,145/- under Section 14A of the Income Tax Act, 1961 [in short, “Act”] given the fact that the respondent/assessee has not earned any exempt income. 8.1 Mr Kumar cannot but accept, that the issue raised in the present appeal is covered inter alia by the following judgments: (i) Cheminvest Ltd. v. CIT (2015) 378 ITR 33 (ii) CIT v. M/s Chettinad Logistics Pvt. Ltd. [2017] 80 taxmann.com 221 (Madras) (iii) Judgment dated 03.05.2023 passed in ITA 250/2023 titled Principal Commissioner of Income Tax – 4 Delhi v. M/s Modern Info Technology Pvt. Ltd. 9. Insofar as the Chettinad Logistics is concerned, which included one of us i.e., Rajiv Shakdher, J., the SLP filed was dismissed by the Supreme Court via order dated 02.07.2018 reported in [2018] 95 taxmann.com 250 (SC). Digitally Signed By:ATUL JAIN Signing Date:20.06.2023 16:23:16 Signature Not Verified

ITA No.266/2023 Page 3 of 3

10.

According to us, no substantial question of law arises for consideration. 11. The appeal is, accordingly, closed.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

MAY 9, 2023/pmc

Digitally Signed By:ATUL JAIN Signing Date:20.06.2023 16:23:16 Signature Not Verified

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