HOLLYFIELD TRADERS PVT. LTD.,NORTH TWENTY FOUR PARGANAS vs. CIT(A), KOLKATA

Shri Ayush Kedia, ld.AR appeared on behalf of the assessee and Smt. Madhumita Das, ld. Sr.DR appeared on behalf of the revenue.

The appeal of the assessee is barred by 77 days. In this regard, the assessee has filed affidavit stating sufficient reasons for condonation of delay, which are also not found to be false. Ld. Sr. DR also did not raise any serious objection. Accordingly, the delay of 77 days in filing the appeal is condoned and the appeal is admitted for hearing.

It was the submission by the ld. AR that the only issue in the appeal of the assessee is in respect of the disallowance u/s.14A of the Act made by the AO. It was the submission the assessee had earned exempt income Rs.2,75,000/- during the impugned assessment year. It was the submission that the AO had computed the disallowance u/s.14A f the Act at Rs.10,90,605/-. It was the submission that the only prayer of the assessee is that the disallowance u/s.14A of the Act may be restricted to the exempt income as earned by the assessee. It was the submission that the issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of State Bank of Patiala, reported in [2018] 99 taxmann.com 286 wherein the Hon’ble Supreme Court confirmed the view taken by the Hon’ble Punjab & Haryana High Court of restricting the disallowance to the quantum of exempt income. The ld. AR has also relied upon the decision of the Hon’ble Supreme Court in the case of Caraf Builders & Constructions (P) Ltd., reported in [2019] 112 taxmann.com 322(SC).

In reply, ld. Sr. DR vehemently relied on the order of the ld. CIT(A). It was the submission that the revenue’s SLP in the case of India Bulls on the issue is pending before the Hon’ble Supreme Court.

I have considered the rival submissions. A perusal of the facts and circumstances of the case shows that the issue in this appeal is squarely covered by the decision of the Hon’ble Supreme Court in the case of State Bank of Patiala, reported in [2018] 99 taxmann.com 286, therefore, the AO is directed to restrict the disallowance u/s.14A of the Act to the amount of the exempt income as earned by the assessee.