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Facts
The Revenue challenged the order of the NFAC for A.Y. 2013-14, which deleted disallowances of Rs. 8,80,24,000 under Section 14A/Rule 8D(2)(iii) and Rs. 3,67,00,000 under Section 36(1)(xii) for capital expenditure. The Revenue's appeal was filed with a delay, which the Tribunal condoned after finding no malafide intention and acknowledging a system error.
Held
The Tribunal upheld the CIT(A)'s decision to delete both disallowances. It noted that the CIT(A) had correctly relied on previous judgments of the Delhi High Court and co-ordinate benches in the assessee's own case, which established that no disallowance under Section 14A was warranted without exempt income, and expenses under Section 36(1)(xii) were allowable.
Key Issues
Whether the CIT(A) erred in deleting disallowances under Section 14A and Section 36(1)(xii) of the Income Tax Act, and condonation of delay in filing the appeal.
Sections Cited
Section 14A, Rule 8D(2)(iii), Section 36(1)(xii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI ‘E’ BENCH,
Before: SHRI SAKTIJIT DEY, & SHRI NAVEEN CHANDRA
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 13.02.2023 pertaining to A.Y. 2013-14.
None appeared on behalf of the assessee.
The Revenue has raised the following grounds of appeal:
“1. Whether on the facts and circumstances of the case the ld. CIT(A)/NFAC has erred in deleting the disallowance of Rs. 8,80,24,000/- u/r 8D(2)(iii) of the I.T. Rule and provision of section 14A of the Act without considering the basic facts of the case.
2. Whether on the facts and circumstances of the case the ld. CIT(A)/NFAC has erred in deleting the disallowance of capital expenditure u/s 36(1)(xii) of the Act amounting to Rs. 3,67,00,000/- without considering the basic facts of the case.”
At the very outset, the ld. DR pointed out to the application dated 27.04.2023 praying for condonation of delay in filing the appeal.
We find that the due to system error, the appeal could not be downloaded from ITBA. In our considered opinion, technicalities should not come in the way of imparting justice considering the cause for delay. We do not find any malafide intention on the part of the Revenue. Therefore, the delay is condoned.
None appeared on behalf of the assessee in spite of notice.
Therefore we decided to proceed exparte.
The ld. DR was heard at length. Case records carefully perused
After considering the orders of the authorities below and perusing the relevant material on record, we are convinced that there is no error in the finding of the ld. CIT(A). With respect to the issue of disallowance u/s 14A of the Act, the ld. CIT(A), at paras 6.9 to 6.12 of his order has directed the Assessing Officer to delete the addition of Rs. 8,8-,24,000 by following the decision of the Hon'ble High Court of Delhi passed in assessee’s own case for Assessment year 2010-11 in 103 Taxmann.com 325 [Delhi] wherein addition made u/s 14A of the Act was deleted as the assessee had no exempt income.
With respect to disallowance of expenditure u/s 36(1)(xii) of the Act, the ld. CIT(A) at Paras 6.13 to 6.19 of his order, has directed the Assessing Officer to allow deduction u/s 36(1)(xii) of the Act delete the addition of Rs. 3,67,00,000/- by following the decision of the co-ordinate bench in assessee’s own case for A.Ys 2005-06 to 2007-08 vide order dated 23.11.2012 in to 1130/DEL/2012 wherein the issue of applicability of provisions of section 36(1)(xii) of the Act in respect of expenses claimed by the assessee towards grant released to the institutions and royalty paid has been quite extensively deliberated by placing reliance on earlier decision in assessee’s own case for A.Ys 2003-04 and 2004-05 and the appeal of the Revenue was dismissed.
Therefore, we are convinced that there is no merit in the grounds raised by the Revenue. The ld. CIT(A) has followed the order of the Hon'ble High Court of Delhi and Delhi Tribunal’s order in assessee’s own case and has allowed its appeals. Hence, by respectfully following the Hon'ble High Court of Delhi and Tribunal orders, and in view of the foregoing discussion, we cannot allow the grounds raised by the Revenue before us and we confirm the finding of the ld. CIT(A). Accordingly, both the grounds raised in this appeal stand dismissed.
In the result, the appeal of the Revenue in stands dismissed.
The order is pronounced in the open court on 25.04.2024.