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Income Tax Appellate Tribunal, MUMBAI BENCH “C”, MUMBAI
आयकर अपील�य अ�धकरण मुंबई पीठ “सी ” �ी �वकास अव�थी, �या�यक सद�य एवं �ी एस. �रफौर रहमान, लेखा सद�य के सम� IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C”, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER आअसं. 327/मुं/2021(�न.व.2013-14) (A.Y.2013-14) Dy. Commissioner of Income Tax -2(3)(1), Room No.509, 5th Floor, Aaykar Bhavan, M.K.Road, : अपीलाथ�/ Appellant Mumbai 400 020 बनाम/ Vs. M/s. Patel Energy Resources Ltd., Patel Engineering Compound, Patel Estate Road, Jogeshwari(W), Mumbai 400 102 PAN: AAECP-5477-H : ��थ�/ Respondent Appellant by : Shri R.A.Dhyani Respondent by : Shri Mayur Kisnadwala सुनवाई की तारीख/ : 10/03/2022 Date of Hearing घोषणा की तारीख / : 17/03/2022 Date of Pronouncement आदेश/ ORDER PER VIKAS AWASTHY, JM:
This appeal by the Revenue is directed against the order Commissioner of Income Tax(Appeals)-17, Mumbai [in short 'the CIT(A)’] dated 31/01/2020 for the assessment year 2013-14.
The appeal is time barred by 346 days. The Revenue has filed an application for condonation of delay. A perusal of the application shows that the order of CIT(A) dated 31/01/2020 was received by the Assessing Officer on 07/02/2020. The last date for filing appeal was 07/04/2020, but on account of COVID-19 Pandemic the appeal was filed on 19/03/2021, thus, resulting in delay of 346 days in filing of appeal. The ld. Departmental Representative submitted that the time limit for filing of the appeal was extended due to Pandemic by Hon'ble Supreme Court of India vide order dated 23/03/2020 [117 taxmann.com 66(SC)]. In fact there is not delay in filing of the appeal in view of the time extended by the Hon’ble Supreme Court of India. We are satisfied that the delay in filing of the appeal was on account of the reasons stated in the application. In fact the time for filing of the appeal was enlarged by the Hon’ble Supreme Court order (supra), Therefore, the delay of 346 days in filing of appeal is condoned and appeal of the Revenue is admitted for disposal on merits.
The solitary issue raised by the Revenue in appeal is with regard to deletion of addition Rs.18,23,62,853/- made in the assessment order on account of disallowance u/s. 14A r.w.r. 8D of the Income Tax Act,1961 ( in short 'the Act').
Shri R.A.Dhyani representing the Department vehemently defended the assessment order and placed reliance on CBDT Circular No.5 of 2014 dated 11/02/2014. The ld. Departmental Representative submitted that the aforesaid circular clearly states that disallowance u/s. 14A r.w.r. 8D of the Act is to be made even where tax payer in a particular year has not earned any exempt income. The ld. Departmental Representative to further strenthen his submission draws support from the following decisions:
(i) Maxopp Investments Ltd. vs. CIT, 402 ITR 640(SC); and (ii)Lally Motors India Pvt. Ltd. vs. PCIT , 170 ITD 370 (Amritsar- Trib) 5. On the other hand, Shri Mayur Kisnadwala appearing on behalf of the assessee strongly supported the order of CIT(A).The ld. Authorized Representative for the assessee pointed that no fresh investments were made in the impugned assessment year. The investments made were from own funds. Own funds of the assessee are sufficient to cover the investments. The fund situation for making investments has not been disputed by the Department. The ld. Authorized Representative for the assessee referred to the findings of the CIT(A) in para -4 of the impugned order. The ld. Authorized Representative for the assessee further submitted that it is a trite law that where no exempt income is earned no disallowance is to be made. The assessee has not earned any dividend income during the period relevant to the assessment year under appeal. Hence, no disallowance is required to be made under section 14A of the Act.
Both sides heard, orders of authorities below examined. Undisputedly, the assessee has not earned any exempt income during the period relevant to the assessment year under appeal. It is no more res-integra that no disallowance u/s.14A is warranted in the absence of exempt income. The Hon'ble Jurisdictional High Court in the case of CIT vs. Delight Enterprises in Income Tax Appeal No.110 of 2009 decided on 26/02/2009 and in the case of PCIT vs. Ballarpur Industries Ltd. in Income Tax Appeal No.51 of 2016 decided on 13/10/2016 has endorsed this view. The Hon'ble Supreme Court of India in the case of PCIT vs. State Bank of Patiala, 99 taxmann.com 286 has held that disallowance u/s. 14A of the Act cannot exceed tax exempt income earned during the relevant period.
Thus, in view of undisputed facts and the settled law we find no merit in the ground raised by the Revenue.
In the result impugned order is upheld and appeal of the Revenue is dismissed.
Order pronounced in the open Court on Thursday the 17th day of March, 2022.