VARSHA VISWANATH PROPERTIES PRIVATE LIMITED. TIRUPATHI,TIRUPATHI vs. ITO, WARD-17(3), HYDERABAD, HYDERABAD

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ITA 480/HYD/2017Status: DisposedITAT Hyderabad09 May 2018AY 2012-132 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that no disallowance can be made under Section 14A of the Income Tax Act when the assessee has not earned any exempt income during the relevant assessment year. This decision followed the precedent set by the Delhi High Court.

What were the facts?

The assessee's appeal was against an order disallowing expenses under Section 14A for the assessment year 2012-13. The core of the dispute was whether disallowance under Section 14A is permissible when no exempt income has been earned.

What were the issues?

The primary issue was whether Section 14A of the Income Tax Act applies for disallowance of expenses when the assessee has not earned any exempt income.

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 “A-SMC”, HYDERABAD

Before: SHRI J. SUDHAKAR REDDY

For Appellant: Shri S. Rama Rao
For Respondent: Shri B. Suresh Babu

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “A-SMC”, HYDERABAD BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA No. 480/Hyd/2017 Assessment Year: 2012-13 M/s Varsha Viswanath vs. ITO, Properties Pvt Ltd., Ward-17(3), Tirupati. Hyderabad. PAN- AAACV7381A (Appellant) (Respondent) Assessee by : Shri S. Rama Rao Revenue by : Shri B. Suresh Babu Date of hearing : 09-05-2018 Date of pronouncement : 09-05-2018 ORDER PER SHRI J. SUDHAKAR REDDY, AM: This appeal is filed by the assessee directed against the order of the Ld. CIT(A)-5, Hyderabad, dated 30.01.2017 for the A.Y 2012-13 passed u/s 250 of the IT Act, 1961 (the Act).

2.

The sole issue that arises for my adjudication is whether the disallowance can be made u/s 14A of the Act, when the admitted fact is that the assessee has not earned any exempt income during the year. The Hon’ble Delhi High Court in the case of M/s Cheminvest Ltd., Vs CIT, reported in (2009) 317 ITR 86, has held that no disallowance can be

2 ITA No. 480/Hyd/2017 M/s Varsha Viswanath Properties Pvt Ltd., Tirupati. made u/s 14A of the IT Act, when the assessee has no exempt income.

3.

The order of the Special Bench of the Tribunal, reported in 121 ITD 318 (Del)(SB) has been reversed by the Hon’ble High Court on this issue, hence we uphold the contentions of the assessee by following judgments of the Hon’ble Delhi High Court in the case of M/s Cheminvest Ltd., Vs CIT (supra) and delete the disallowance made u/s 14A of the Act.

4.

In the result this appeal of the assessee is allowed. Pronounced in the open court on 09th May, 2018.

Sd/- (J. SUDHAKAR REDDY) ACCOUNTANT MEMBER

Hyderabad, Dated: 09th May, 2018. KRK 1) M/s Varsha Viswanath Properties Pvt Ltd., Door No. 19- 3/9, 4th Floor, Ramanuja Circle, Tiruchanur Road, Tirupati-01 2) The ITO, Ward-17(3), Hyderabad. 3) CIT(A) -5, Hyderabad. 4) The Pr.CIT(A)-5 Hyderabad. 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File

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