M/S. ROYAL CRYSTAL DEALERS PVT. LTD.,KOLKATA vs. ITO, WARD - 4(1), KOLKATA, KOLKATA

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ITA 238/KOL/2018Status: DisposedITAT Kolkata27 June 2018AY 2009-102 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal restored the appeal to the Assessing Officer (AO) for verification of the assessee's claim of not receiving any dividend. If the claim is true, no disallowance under Section 14A should be made.

What were the facts?

The assessee claimed no dividend income was received during the assessment year. The disallowance in dispute was made under Section 14A of the Income Tax Act read with Rule 8D.

What were the issues?

Whether disallowance under Section 14A is permissible when no dividend income has been earned by the assessee.

Which sections of the Income-tax Act were involved?

Section 14A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, “SMC” BENCH : KOLKATA

Before: Hon’ble Shri J.Sudhakar Reddy, AM]

Hearing: 07.06.2018Pronounced: 27.06.2018

ORDER This appeal by the Assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-2, Kolkata (hereinafter the ‘ld. CIT(A)’), dt. 28.04.2016 passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’) for the assessment year 2009-10.

2.

The sole disallowance in dispute was made u/s 14A of the Act read with Rule 8Dof the Income Tax Rule, 1962 (‘Rule’). The assessee claims that it had not received any dividend during the year. Thus, no disallowance can be made u/s 14A of the Act as held by the Hon’ble Delhi High Court in the case of Chem Invest in 378 ITR 33 (Del). This appeal is restored to the file of the AO for verification of this claim that the assessee has not received any dividend and if it is true, no disallowance should be made u/s 14A of the Act.

M/s Royal Crystals Dealers Pvt. Ltd. A.Yr.2009-10 3. In view of the above, this appeal is set aside to the file of the Ld. AO for fresh adjudication in accordance with law.

6.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the Court on 27.06.2018

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