ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KOTA vs. M/S MITTAL PIGMENTS PVT. LTD., KOTA

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh Hkkxpan] ys[kk lnL; ,oa Jh dqy Hkkjr] U;kf;d lnL; ds le{k BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM vk;dj vihy la-@ITA No. 679/JP/2017 fu/kZkj.k o"kZ@Assessment Year : 2012-13 cuke Assistant Commissioner M/s Mittal Pigments Pvt. Ltd., Vs. of Income Tax, A-203, I.P.I.A. Road No. 5, Circle-1, Kota Kota. PAN No.: AABCM 1418 N vihykFkhZ@Appellant izR;FkhZ@Respondent jktLo dh vksj ls@ Revenue by : Shri R.A. Verma (Addl.CIT) fu/kZkfjrh dh vksj ls@ Assessee by : None lquokbZ dh rkjh[k@ Date of Hearing : 05/10/2017 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 09/10/2017 vkns'k@ ORDER

PER: BHAGCHAND, A.M.

This is the appeal filed by the revenue emanates from the order of

the ld. CIT(A), Kota dated 26/06/2017 for the A.Y. 2012-13, wherein the

revenue has taken sole effective ground of appeal, which is as under:- “On the facts and in the circumstances of the case, the ld. CIT(A) has erred in: (i) deleting the addition of Rs. 17,388/- made by the A.O. U/s 14A of the I.T. Act, 1961 r.w.r. 8D of the I.T. Rules, 1962 and in view of CBDT Circular No. 05/2014.” 2. The only issue involved in the appeal is against deleting the addition

of Rs. 83,336/- made U/s 14A of the Income Tax Act, 1961 (in short the

ITA 679/JP/2017 2 ACIT Vs. Mittal Pigments Pvt. Ltd.

Act) read with Rule 8D of the Income Tax Rules, 1962 (in short the Rules

and in view of the CBDT Circular No. 05/2014.

under:-

“I have gone through assessee’s submission and AO’s findings.

As regards Ground of appeal no 1, vide Appeal No.27/14-15 for A.Y 2011- 12 (Date of Order: 09/03/2017) I have decided this issue in favour of the appellant. Since the facts involved in the addition remain the same in this appeal as well, 1 see no reason to deviate from the earlier line of decision.

The A.O has not brought out any actual exempt income claimed by the appellant.

The Delhi High Court in the recent case of Cheminvest Ltd. v. C1T 120151 378 1TR 33/234 Taxman 761/61 taxman.com 118 held that there should be an actual receipt of exempt income during the relevant year for the purpose of disallowance of any expenditure incurred in relation to such income. Overruling ITAT Special Bench's (SB) ruling in this case, and following its own prior ruling in the case of CIT v. Holcim India (P.) Ltd. [2015] 57 taixmann.com 28 (Delhi), the Delhi HC held that there can be no disallowance of expense if no exempt income is actually earned during the relevant tax year.

HIGH COURT OF MADRAS in Redington (India) Ltd. v. Additional Commissioner of Income-tax, Co. Range-V, Chennai 77 taxmann.com 257 (Madras) has recently held vide order dated December 23, 2016 that-

Section 14A of the Income-tax Act, 1961, read with rule 8D of the Income- tax Rules, 1962 - Expenditure incurred in relation to income not includible in total income (Condition precedent) - Assessment year 2007-08 - Whether provision of section 14A is relatable to earning of actual income

ITA 679/JP/2017 3 ACIT Vs. Mittal Pigments Pvt. Ltd. and not notional or anticipated income, hence, where there is no exempt income in a year, there cannot be a disallowance of expenditure in relation to an assumed income Held yes

Thus the disallowance of Rs. 17,388/- made by the A.O. is not held to be justified and is to be deleted.”

behalf of the assessee.

the findings as recorded by the ld. CIT(A) in his order on facts as well as

on law. Therefore, we find no reason to interfere in the order of the ld.

CIT(A) and the same stands uphold.

Order pronounced in the open court on 09/10/2017.

Sd/- Sd/- ¼dqy Hkkjr½ ¼Hkkxpan½ (Kul Bharat) (BHAGCHAND) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 09th October, 2017

*Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- The ACIT, Circle-1, Kota 1. izR;FkhZ@ The Respondent- M/s Mittal Pigments Pvt. Ltd., Kota. 2.

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vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत