JCIT, CORP CIR 2(2), CHENNAI vs. HYUNDAI STEEL INDIA P LTD, KANCHEEPURAM

This appeal filed by the Revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals) 6, Chennai dated 16.11.2018 relevant to the assessment year 2014-15. The Revenue has challenged the order of the ld. CIT(A) in deleting the disallowance under section 14A of the Act r.w. Rule 8D.

The appeal filed by the Revenue is delayed by 3 days, for which, the Revenue has filed a petition for condonation of the delay, to which; the ld. Counsel for the assessee has not raised any serious objection. Consequently, since the Revenue was prevented by sufficient cause, the delay of 3 days in filing of the appeal stands condoned and the appeal is admitted for adjudication.

Brief facts of the case are that the assessee filed return of income for the assessment year 2014-15 on 30.11.2014 declaring an income of ₹.9,23,94,570/-. The return was processed under section 143(1) of the Income Tax Act, 1961 [“Act” in short]. The Assessing Officer completed scrutiny assessment under section 143(3)of the Act determining the assessed total income at ₹. 9,93,85,631/- after making disallowance of ₹.69,69,630/- under section 14A of the Act. On appeal, after considering the submissions of the assessee and facts of the case and by following the decision in the case of CIT v. Chettinad Logistics (P) Ltd. [2017] 80 taxmann.com 221 (SC), the ld. CIT(A) deleted disallowance made under section 14A of the Act.

Aggrieved, the Revenue is in appeal before the Tribunal. It was the submission of the ld. DR that a proposal in the case of CIT v. Chettinad Logistics (P) Ltd. (supra) has been sent to the ld. Pr. DGIT (L&R), New Delhi for filing of review petition before the Hon’ble Supreme Court and therefore, pleaded that the order passed by the ld. CIT(A) should be reversed and restored that of the Assessing Officer.

Per contra, the ld. Counsel for the assessee has submitted that the SLP preferred by the Department has been dismissed by the Hon’ble Supreme Court and prayed for confirming the order passed by the ld. CIT(A).

We have heard both the parties, peruse the materials available on record and gone through the orders of authorities below. The Assessing Officer in his order observed that the assessee has made investments whose income is not includable in the total income of the assessee. Therefore, the Assessing Officer invoked the provisions of section 14A of the Act and disallowed the expenses determined in accordance with Rule 8D of the Income Tax Rules. On appeal, by following the decision in the case of CIT v. Chettinad Logistics (P) Ltd. (supra), wherein, while dismissing the SLP filed by the Department, it was held that where no exempt income i.e., dividend, was earned in the relevant assessment year by the assessee, section 14A of the Act could not be invoked, the ld. CIT(A) deleted the addition of ₹.69,69,631/- made under section 14A of the Act. Against the judgement of the Hon’ble Jurisdictional High Court in the above referred case, the Hon’ble Supreme Court dismissed the SLP preferred by the Department and no other order against the judgement of the Hon’ble Jurisdictional High Court was brought on record. In view of the above, we find no reason to interfere with the order passed by the ld. CIT(A). Accordingly, the ground raised by the Revenue stands dismissed.

In the result, the appeal filed by the Revenue is dismissed. Order pronounced on the 19th July, 2019 at Chennai.