DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(1)(1), BANGALORE vs. M/S AVESTHAGEN LIMITED, BANGALORE

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ITA 2962/BANG/2018Status: DisposedITAT Bangalore07 February 2020AY 2011-122 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 upheld the decision of the CIT(A) to delete the disallowance. This was based on the fact that the assessee did not earn any exempt income from the investments, aligning with various High Court and Supreme Court decisions.

What were the facts?

The revenue appealed against the deletion of disallowance made under Section 14A read with Rule 8D by the CIT(A). The assessee had made substantial investments in foreign companies which were already taxed and did not yield any exempt income.

What were the issues?

Whether disallowance under Section 14A read with Rule 8D is warranted when no exempt income is earned from investments.

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, ‘B’ BENCH : BANGALORE

Before: SHRI. A. K. GARODIA & SMT. BEENA PILLAI

ORDER

PER BEENA PILLAI, JUDICIAL MEMBER Present appeal has been filed by revenue against order dated 12/07/18 passed by Ld. CIT (A) – 1, Bangalore for assessment year 2011 – 12. 2. At the outset we notice that the only issue raised by revenue is in regards to disallowance made under section 14 A read with Rule 8D which has been deleted by Ld. CIT (A). On perusal of records it is observed that assessee has made total investment of Rs. 44,56,31,689/- in foreign companies, which are Page 2 of 2 ITA 2962/Bang/2018 A. Y : 2011 – 12 already subjected to tax, and that, assessee has not earned any exempt income during the year from these investments.

3.

It is observed that Ld. CIT (A) deleted addition made by Ld.AO by following decision of Hon’ble Karnataka High Court in case of M/s. Ambuthirtha Power Pvt. Ltd., in vide order dated 07/07/17 and decision of this Tribunal in case of M/s. Quality Engineering Software Technologies Pvt. Ltd., reported in 52 Taxmann.com 515.

4.

It is further observed that Hon’ble Supreme Court in the case of DCIT vs GE VK Project and Technical Services Ltd., reported in (2019) 106 Taxmann.com 181 as upheld this view. Under such circumstances we do not find any infirmity in the observations of Ld. CIT (A) and the same is upheld. In the result appeal filed by revenue stands dismissed. Order pronounced in the open court on 07th February, 2020. Sd/- Sd/- (A. K. GARODIA) (BEENA PILLAI) Accountant Member Judicial Member

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