ACIT, CHENNAI vs. M/S. CHOLA BUSINESS SERVICES LTD., CHENNAI

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ITA 3105/CHNY/2016Status: DisposedITAT Chennai26 April 2018AY 2012-133 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 held that no disallowance under Section 14A is permissible if no exempted income was earned. It also confirmed the CIT(Appeals)'s decision to allow the ESI contribution as the payment was made before the due date for filing the return.

What were the facts?

The Revenue appealed an order of the CIT(Appeals) concerning assessment year 2012-13. The appeal involved issues of disallowance under Section 14A and employee's contribution to ESI.

What were the issues?

Whether disallowance under Section 14A is warranted when no exempted income is earned, and whether employee's ESI contribution paid before the due date for filing the return is allowable.

Which sections of the Income-tax Act were involved?

Section 14A,Section 131(1)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI ABRAHAM P. GEORGE

Hearing: 26.04.2018Pronounced: 26.04.2018

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -1, Chennai, dated 16.08.2016 and pertains to assessment year 2012-13.

2.

The first issue arises for consideration is disallowance made by the Assessing Officer under Section 14A of the Income-tax Act, 1961 (in short 'the Act').

3.

We heard Shri AR.V. Sreenivasan, the Ld. Departmental Representative. No one appeared for the assessee even though the notice of hearing was served on it. The CIT(Appeals) found that the assessee has not received any exempted income on making investment. This Tribunal is of the considered opinion that when the assessee has not earned any exempted income, in view of the judgment of Madras High Court in Redington (India) Ltd. v. Addl.

CIT (2017) 77 taxmann.com 257, there cannot be any disallowance.

Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

4.

The next issue is with regard to employees’ contribution towards ESI.

5.

Admittedly, the assessee has not paid the amount within the due date prescribed under Provident Fund Act. But, it was the fact that the assessee paid the contribution within the due date for filing return under Section 131(1) of the Act. Therefore, the CIT(Appeals) has rightly allowed the claim of the assessee. Hence, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.

6.

In the result, the appeal filed by the Revenue is dismissed.

Order pronounced in the open court on 26th April, 2018 at Chennai.

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