MATRIX ENPORT HOLDINGS PRIVATE LIMITED, SECUNDERABAD,HYDERABAD vs. ACIT, CIRCLE-16(2), HYDERABAD, HYDERABAD

ITA 15/HYD/2017Status: DisposedITAT Hyderabad08 June 2018AY 2012-138 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 14A of the Income Tax Act cannot be applied in the absence of any exempt income earned by the assessee. Therefore, the disallowance made by the AO and confirmed by the CIT(A) was not justified.

What were the facts?

The assessee, an investment holding company, filed its return declaring a loss. The Assessing Officer (AO) made an addition of Rs. 57,52,790/- on account of disallowance of expenditure under Section 14A. The CIT(A) confirmed the addition.

What were the issues?

Whether disallowance under Section 14A is permissible when no exempt income has been earned by the assessee.

Which sections of the Income-tax Act were involved?

Section 14A

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

Before: SMT P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

For Appellant: Shri K.A. Sai Prasad
For Respondent: Shri M. Naveen
Hearing: 31/05/2018Pronounced: 08/06/2018

PER S. RIFAUR RAHMAN, A.M.:

This appeal filed by the assessee is directed against the order dated 25/10/2016 of CIT(A) – 4, Hyderabad for AY 2012-13. 2. Briefly the facts of the case are, assessee, an investment holding company, filed its return of income for the AY 2012-13 on 13/12/2012 declaring loss of Rs. 24,550/-. The return was processed u/s 143(1) of the Act. Subsequently, the case was selected for scrutiny and notices u/s 143(2) and 142(1) were issued. The AO completed the assessment by making an addition of Rs. 57,52,790/- on account of disallowance of expenditure u/s 14A of the I.T. Act.

3.

Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A). Matrix Enport Holdings Pvt. Lt

The order continues below.

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