ITO, NEW DELHI vs. M/S. RICHMOND PARK PROPERTY MANAGEMENT SERVICE PVT. LTD., NEW DELHI

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ITA 3655/DEL/2017Status: DisposedITAT Delhi11 November 2020AY 2012-132 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 held that earning of exempt income is a prerequisite for disallowance under Section 14A, following jurisdictional High Court rulings. Therefore, no disallowance was warranted in this case.

What were the facts?

The assessee neither earned any exempt income nor debited any expenses related to such income in its Profit & Loss account. The revenue appealed against the deletion of disallowance under Section 14A.

What were the issues?

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

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(2)Show list

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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI

Before: Sh. Amit ShuklaDr. B. R. R. Kumar

Hearing: 05.11.2020Pronounced: 11.11.2020

Per Amit Shukla, Judicial Member:

1.

The present appeal has been filed by the revenue against the order of the ld. CIT(A)-16, New Delhi, dated 01.03.2017.

2.

Following grounds have been raised by the revenue: “1 On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the disallowance of Rs. 1,89,28,916/- u/s 14A of the Income Tax Act, 1961 ignoring CBDT Circular No. 5/2014 wherein it issued a clarification that Rule 8D read with section 14A of the Income Tax Act, 1961 provides for disallowance of expenditure even where taxpayer in a particular year has not earned any exempt income.”

2 Richmond Park Property Management Service P. Ltd. 3. At the outset, the uncontroverted facts brought to the notice of the Bench that the assessee has neither earned any exempt income nor debited an expenses in the P&L account pertaining to expenditure.

4.

The revenue has filed appeal before the Tribunal owing to CBDT Circular No.5/2014 dated 11.02.2014.

5.

The Hon’ble Jurisdictional High Court in the case of CIT Vs. Holcim India Pvt. Ltd. in dated 05.09.2014, Maxopp Investment Ltd. Vs. CIT (2012) 347 ITR 272 (Del) and Cheminvest Ltd. Vs. CIT (2009) 317 ITR 86 (Del) has categorically held that earning of exempt income is a pre- requisite for disallowance u/s 14A.

6.

Respectfully following the ratio of the Hon’ble Jurisdictional High Court, we hereby hold that no disallowance u/s 14A is called for in the instant case.

7.

In the result, the appeal of the revenue is dismissed. Order Pronounced in the Open Court on 11/11/2020.

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