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Income Tax Appellate Tribunal, ‘A’ BENCH : CHENNAI
Before: SHRI ABRAHAM P.GEORGE & SHRI GEORGE MATHAN
आदेश / O R D E R
PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER:
These are appeals filed by the Revenue for the impugned assessment years directed against orders dated 30.08.2017 of ld. Commissioner of Income Tax (Appeals)-3, Chennai.
ITA Nos.2886 & 2887/2017 :- 2 -:
Appeal of the Revenue for the assessment year 2010-2011 is taken up first for disposal.
3. Grievance of the Revenue is that ld. Commissioner of Income Tax (Appeals) allowed a claim of deduction of �52,24,783/- made by the assessee u/s.80IB(10) of the Income Tax Act, 1961 (in short ‘’the Act’’), which was denied by the ld. Assessing Officer.
Ld. Counsel for the Revenue submitted that assessee engaged in the business of developing housing projects had claimed deduction u/s.80IB(10) of the Act. However, according to the ld. Departmental Representative, assessee was not eligible for such deduction since it was only a works contractor. As per the ld. Departmental Representative, construction agreements entered by the assessee clearly indicated that assessee did not undertake any investment risk.
According to the ld. Departmental Representative, assessee was only constructing residential houses for buyers who had entered agreement with it. Thus, as per the ld. Departmental Representative, assessee could not be considered as an undertaking executing housing projects.
Per contra, ld. Authorised Representative strongly supporting the order of the ld. Commissioner of Income Tax (Appeals) submitted that similar issue had come up before this Tribunal in assessee’s own
ITA Nos.2886 & 2887/2017 :- 3 -: case for assessment year 2009-2010. As per the ld. Authorised Representative, this Tribunal vide its order dated 30.08.2013 in had held the assessee to be eligible for such deduction.
We have considered the rival contentions and perused the orders of the authorities below. The question whether assessee was eligible for deduction u/s.80IB(10) of the Act had come up before this Tribunal in appeals for assessment years 2008-2009 as well as for assessment year 2009-2010. What was held by this Tribunal at paras 2 & 3 of the order dated 30.08.2013 in is reproduced hereunder:-
‘’2.When the appeal was taken up, Ld. Counsel for the assessee submitted that the issue regarding eligibility for deduction under Section 80-IB(10) of the Act stood decided in favour of the assessee in &1247/Mds/2011, dated 15th May, 2013. Vis-à-vis the second issue, the ld. Counsel for the assessee submitted that apportionment of interest was not decided by the Commissioner of Income Tax (Appeals), though raised by the assessee. Ld. D.R. fairly admitted that averments of the assessee’s counsel were correct.
We have perused the orders and heard the contentions. In so far as the assessee’s claim of deduction under Section 80-IB(100 of the Act is concerned, the issue had come up before this Tribunal on Revenue’s appeal in & 1247/Mdws/2011. Ld. Commissioner of Income Tax
ITA Nos.2886 & 2887/2017 :- 4 -:
(Appeals) had held this issue in favour of the assessee relying on his own order on assessee’s appeal for assessment year 2008-09. Revenue’s appeal against such order of the ld. Commissioner of Income Tax (Appeals) stood dismissed by this Tribunal on this particular issue vide its order dated 15/05/2013 in & 1247/Mds/2011’’.
The fact situation being same, we are of the opinion that ld. Commissioner of Income Tax (Appeals) was justified in following the above order of the Tribunal. We therefore do not find any reason to interfere with the order of the ld. Commissioner of Income Tax (Appeals).
Now, we take up appeal of the Revenue for assessment year 2014-2015.
Sole grievance raised by the Revenue is that ld. Commissioner of Income Tax (Appeals) deleted the disallowance made by the ld. Assessing Officer u/s.14A of the Act, r.w.Rule 8D of the Income Tax Rules, 1962 (in short ‘’the Rules’’)
Ld. Counsel for the Revenue submitted that though assessee was not having any exempt income, Section 14A r.w.r.8D had to be applied considering CBDT Circular No.5/2014, dated 11.02.2014.
ITA Nos.2886 & 2887/2017 :- 5 -:
Per contra, ld. Authorised Representative strongly supported the order of the Commissioner of Income Tax (Appeals).
Reliance was placed on the judgment of Hon’ble Jurisdictional High Court in the case of Redington India Ltd vs. Addl. CIT (2016) 97 CCH 0219.
We have considered the rival contentions and perused the orders of the authorities below. The question whether a disallowance u/s. 14A of the Act could be made when there was no exempt income claimed by an assessee stands answered by the judgment of Jurisdictional High Court in the case of Redington India Ltd vs. Addl.
CIT (supra). What was held by the Jurisdictional High Court at para 15 is reproduced hereunder:-
‘’15. The exemption extended to dividend income would relate only to the previous year when the income was earned and none other and consequently the expenditure incurred in connection therewith should also be dealt with in the same previous year. Thus, by application of the matching concept, in a year where there is no exempt income there cannot be a disallowance of expenditure in relation to such assumed income. (Madras Industrial Investment Corporation Ltd vs. CIT (225 ITR 802)). The language of Sec. 14A(10 should be read in that context and such that it advances the scheme f the Act rather than distort it’’.
ITA Nos.2886 & 2887/2017 :- 6 -:
In the circumstances, we do not find any infirmity in the order of the ld. Commissioner of Income Tax (Appeals).
In the result, both the appeals of the Revenue are 12. dismissed.
Order pronounced on Monday, the 1st day of October, 2018, at Chennai.