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Income Tax Appellate Tribunal, “L” Bench, Mumbai
O R D E R Per B.R. Baskaran (AM) :-
Both the appeals filed by the Revenue are directed against the orders passed by the learned CIT(A)-14, Mumbai and they relate to A.Ys. 2011-12 & 2012-13. The Revenue is aggrieved by the decision of the learned CIT(A) in deleting the disallowance made by the Assessing Officer u/s. 14A of the Act in both the years.
We heard the parties and perused the record. The assessee is engaged in the business of building and operating telecommunication towers and related assets. The assessee did not make any disallowance u/s. 14A of the Act while computing total income, even though it held investments to the tune of ` 50007.50 lakhs. The assessee submitted that it has received major portion of investments under a Scheme of amalgamation from other companies and remaining investments were brought forward from earlier years. Accordingly it was submitted that there was no investment activities during these two years
2 M/s. Reliance Infratel Ltd. under consideration. It was also submitted that it did not make any fresh investment nor it received any dividend income during the years under consideration. Accordingly, it was submitted that no disallowance is called for u/s. 14A of the Act in both the years.
The Assessing Officer was not satisfied with the contentions of the assessee. Accordingly, he made disallowance under Rule 8D(2)(iii) of the Act to the tune of ` 250.03 lakhs and ` 250.01 lakhs for A.Ys. 2011-12 & 2012-13 respectively, which were computed at 0.5% of average value of investments. The learned CIT(A) deleted the same on the reasoning that the disallowance is not required to be made u/s. 14A of the Act, if the assessee did not earn any exempt income. The learned CIT(A) placed reliance for this proposition on the decision rendered by Hon'ble Delhi High Court in the case of CIT Vs. Holcim India Pvt. Ltd. (ITA No. 486/2014 & dated 5.9.2014). The Learned CIT(A) also placed reliance on the decision rendered by the Coordinate Bench of the ITAT in the case of Krishna Knitwear Technologies Ltd. Vs. DCIT (ITA No. 2565/Mum/2012 dated 15.2.2016), wherein the decision rendered by Hon'ble Delhi High Court in the case of Cheminvest Ltd. Vs. CIT (378 ITR 33) was followed. The Revenue is aggrieved by the decisions rendered by the learned CIT(A) on this issue in both the years under consideration.
Having heard the rival submission, we are of the view that the orders passed by the learned CIT(A) does not call for any interference for the reasons that the assessee did not earn any dividend income during the year under consideration and further assessee did not carry on any type of investment activity during the years under consideration. We noticed that that the learned CIT(A) has followed decision rendered by Hon'ble Delhi High Court in the case of Cheminvest Ltd. (supra) and Holcim India Pvt. Ltd. (supra) in coming to the conclusion that disallowance u/s. 14A of the Act is not called for when the assessee did not receive any exempt income. Accordingly, we find no reason to interfere with the orders passed by the learned CIT(A) in both the years under consideration.
3 M/s. Reliance Infratel Ltd.
In the result, both the appeals filed by the Revenue are dismissed. Order has been pronounced in the Court on 22.11.2017.