ACIT, CIRCLE-16(1), HYD, HYDERABAD vs. LANCO THERMAL POWER LIMITED, HYDERABAD, HYDERABAD

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ITA 1610/HYD/2016Status: DisposedITAT Hyderabad18 July 2018AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the CIT(A), stating that if no dividend or exempt income is received by the assessee, no disallowance under Section 14A is required.

What were the facts?

The Assessing Officer disallowed expenses under Section 14A of the Income Tax Act. The CIT(A) deleted this disallowance, holding that no exempt income was earned by the assessee during the assessment year.

What were the issues?

Whether disallowance under Section 14A is permissible when the assessee has not earned any exempt income during the assessment year.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, HYDERABAD BENCH “B”, HYDERABAD

Before: SHRI B. RAMAKOTAIAH & SHRI CHALLA NAGENDRA PRASAD

For Respondent: Smt. A. Rajvanshi Jain, DR, Shri P. Murali Mohan Rao, AR
Hearing: 17.07.2018Pronounced: 18.07.2018

Heard together (2 matters)

ITA No. 1610/Hyd/2016
C.O No. 05/Hyd/2018

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “B”, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA No. 1610/Hyd/2016 & C.O No. 05/Hyd/2018 Assessment Year: 2012-13 ACIT, vs. Lanco Thermal Power Circle-16(1), Limited, Hyderabad. Hyderabad. PAN – AABCV6386N (Appellant) / Cross Objector (Respondent)

Revenue by : Smt. A. Rajvanshi Jain, DR Shri P. Murali Mohan Rao, AR Assessee by : Date of hearing 17.07.2018 Date of pronouncement 18.07.2018

O R D E R PER CHALLA NAGENDRA PRASAD, JM:

This appeal is filed by the Revenue against the order of the Ld. CIT(A)-4, Hyderabad dated 25.08.2016 for the A.Y 2012- 13. The only grievance of the Revenue in its appeal is in respect of deletion of disallowance made u/s 14A of the IT Act.

2.

Facts in brief are that the A.O while completing the assessment made disallowance u/s 14A r.w.s 8D of IT Rules. on an appeal the Ld. CIT(A) deleted the disallowance for the reason that the assessee company did not earn any dividend / exempt income from investments during this assessment year. Against this order Revenue is in appeal before us.

3.

At the outset Ld. Counsel for the assessee submitted that the issue in appeal is squarely covered by the decision of the Hon’ble ITAT, Hyderabad Bench in the case of Prathista Industries Ltd., Vs. DCIT in ITA No. 1302/Hyd/2015 dated

2 ITA No. 1610/Hyd/16 & C.O No. 05/Hyd/2018 Lanco Thermal Power Ltd, Hyderabad. 29.04.2016, a copy of the order is placed before us. Referring to this decision Ld. Counsel for the assessee submitted that the Hon’ble Tribunal deleted the disallowance made u/s 14A of the IT Act as no dividend / exempt income was earned during the assessment year.

4.

On the other hand Ld. DR supported the orders of the A.O.

5.

We have heard rival submissions and perused the orders of the authorities below. It is the finding of the Ld. CIT(A) that the assessee did not receive any exempt income during the assessment year under appeal. This finding of the Ld. CIT(A) was not disputed by the Revenue. We further notice that the Ld. CIT(A) following the decision of the Coordinate Bench of this Tribunal in the case of Prathista Industries Ltd., (supra) deleted the disallowance made u/s 14A of the IT Act as there is no exempt income received by the assessee. In the case of Prathistha Industries Ltd., (supra) the Coordinate Bench deleted the disallowance u/s 14A of the IT Act following the decision of the Hon’ble Delhi High Court in the case of Cheminvest Ltd., reported in 378 ITR 33, wherein it has been held that if there is no dividend / exempt income received by the assessee during the assessment year no disallowance is required to be made. Respectfully following the said decision we uphold the order of the Ld. CIT(A) and rejects the grounds raised by the Revenue.

6.

The cross objection filed by the assessee becomes infructuous in view of our above order.

3 ITA No. 1610/Hyd/16 & C.O No. 05/Hyd/2018 Lanco Thermal Power Ltd, Hyderabad. 7. In the result, the appeal filed by the Revenue as well as C.O are dismissed.

Pronounced in the open Court on 18th July, 2018.

Sd/- Sd/- (B. RAMAKOTAIAH) (CHALLA NAGENDRA PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER

Hyderabad, Dated: 18th July, 2018 KRK Copy to:- 1) M/s Lanco Thermal Power Ltd, Lanco House, Plot No. 4, Software Units Layout, Hitech City, Madhapur, Hyderabad – 500081. 2) ACIT, Circle-16 (1), Hyderabad. 3) CIT(A)-4, Hyderabad. 4) Pr. CIT-4, Hyderabad. 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File

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