ACIT, NEW DELHI vs. M/S. SUPER PLASTIC COATS PVT. LTD., NEW DELHI

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ITA 1204/DEL/2016Status: DisposedITAT Delhi17 November 2017AY 2011-123 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 CIT(A)'s decision, stating that the disallowance should be restricted to the exempt dividend income earned by the assessee. The appeal by the Revenue was dismissed.

What were the facts?

The Assessing Officer disallowed expenses under Section 14A read with Rule 8D, amounting to Rs. 47,00,415, against dividend income of Rs. 43,073. The CIT(A) restricted the disallowance to the extent of the exempt dividend income.

What were the issues?

Whether the disallowance of expenses under Section 14A read with Rule 8D should be restricted to the amount of exempt dividend income.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “E”, NEW DELHI

Before: SHRI D. MANMOHAN & SHRI MANOJ KUMAR AGGARWAL

For Respondent: Shri Kumar Parnav, Sr.DR

PER D. MANMOHAN, VP : This appeal by the Revenue is directed against the order passed by the ld.

CIT(A)-8, New Delhi and it pertains to assessment year 2011-12.

2.

The effective ground raised

by the Revenue reads as under :-

1.

1. On the facts and circumstances of the case, the Ld. CIT(A) erred in law and on the facts in restricting the disallowance of expense u/s 14A read with Rule 8D to the extent of Rs.43,073/- out of total addition of Rs.47,00,415/- made by the AO.”

3.

It is not in dispute that the assessee earned dividend income of Rs.43,073/-. However, the Assessing Officer computed the expenditure by invoking the provisions of section 14A read with Rule 8D and accordingly completed the assessment.

4.

On an appeal filed by the assessee, ld. CIT(A) followed the decision of the Jurisdictional High Court in the case of Joint Investments Pvt. Ltd. vs. CIT, 2015 (3) TMI 155, wherein the Hon’ble High Court also held that the disallowance should be restricted to the exempt dividend income earned by the assessee. Accordingly, a direction was given by the ld. CIT(A) to the Assessing Officer to restrict the disallowance to Rs.43,073/-. Aggrieved, The Revenue is in appeal before the Tribunal.

5.

It is not in dispute that the issue is squarely covered by the Jurisdictional High Court and no other contrary decision of the Jurisdictional High Court has been placed before us. Under these circumstances, we hold that the order passed by the ld. CIT(A) does not call for any interference and the appeal of the Revenue is accordingly dismissed.

6.

In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on this 17th day of November, 2017.

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