DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 1(1)(1), BENGALURU vs. M/S. ATRIA BRINDAVAN POWER PRIVATE LIMITED, BENGALURU
In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal upheld the order of the CIT(A) which deleted the disallowance. It was held that no disallowance under Section 14A is required when the assessee has not earned any exempt income.
What were the facts?
The Assessing Officer disallowed expenses under Section 14A of the Income Tax Act, 1961, for the assessment year 2016-17. The assessee contended that no disallowance was warranted as no exempt income was earned.
What were the issues?
Whether disallowance under Section 14A is permissible when the assessee has not earned any exempt income.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(2)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- Cheminvest Ltd. v. ITO338 citing121 ITD 318 · 2009 · ITAT
- Cheminvest Ltd. v. ITO (ITAT, SB-Del)16 citing319 ITR 416 · 2009 · HC
Income Tax Appellate Tribunal, “B’’ BENCH: BANGALORE
Before: SHRI B. R. BASKARAN & SMT. BEENA PILLAI
PER B.R. BASKARAN, ACCOUNTANT MEMBER:
The revenue has filed this appeal challenging order passed by Ld. CIT(A)-1, Bengaluru for the assessment year 2016-17, wherein the Ld. CIT(A) had deleted the disallowance made by the Assessing Officer u/s 14A of the Income-tax Act,1961 ['the Act' for short].
We heard the parties and perused the records. The assessment in the hands of the company for the ITA 1814/Bang/2019 M/s. Atria Brindavan Power Pvt. Ltd., Bangalore assessment year 2016-17 was passed by the A.O. u/s 143(3) of the Act, wherein he made disallowance of Rs.2.63 crores u/s 14A of the Act. The contention of the assessee before Ld. CIT(A) was that he did not earn any exempt income and hence no disallowance u/s 14A of the Act is called for. The A.O. had made the disallowance by following the decision rendered by Delhi Special Bench of Tribunal in the case of Chem Invest Ltd. 121 ITD 318 and decision rendered by Hon’ble Kartakana High Court in the case of Pradeep Kar Vs. ACIT 319 ITR 416. The Ld. CIT(A) noticed that decision of Special Bench in the case of Cheminvest Ltd (supra) has been reversed by Hon'ble Delhi High Court and the decision in the case of Pradeep Kar (supra) was rendered in different context. Accordingly, the Ld CIT(A) accepted the contentions of the assessee and deleted the disallowance with the following observations:
ITA 1814/Bang/2019 M/s. Atria Brindavan Power Pvt. Ltd., Bangalore
The Ld. A.R. submitted that an identical issue was considered by the coordinate bench in the case of assessee’s sister concern named M/s. Atria Hydel Power Limited (ITA No.3365/Bang/2018) dated 28.6.19), wherein identical addition made was deleted.
On the contrary, the Ld. D.R. placed reliance on the order passed by the A.O.
ITA 1814/Bang/2019 M/s. Atria Brindavan Power Pvt. Ltd., Bangalore
We notice that an identical issue was considered by the coordinate bench in the assessee’s sister concern’s case referred above and addition made u/s 14A of the Act was deleted with the following observations:
ITA 1814/Bang/2019 M/s. Atria Brindavan Power Pvt. Ltd., Bangalore ITA 1814/Bang/2019 M/s. Atria Brindavan Power Pvt. Ltd., Bangalore ITA 1814/Bang/2019 M/s. Atria Brindavan Power Pvt. Ltd., Bangalore
Consistent with the view taken in the above said case, we are of the view that no disallowance u/s 14A of the Act is called for when the assessee did not earn any exempt income. Accordingly, we uphold the order passed by the Ld. CIT(A) on this issue.
In the result, the appeal of the revenue is dismissed.
Order pronounced in the open court on 13.3.2020
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