ACIT 3(3)(2), MUMBAI vs. WHITE PEARLS HOTSL & INVESTMENT P.LTD, MUMBAI

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ITA 4717/MUM/2016Status: DisposedITAT Mumbai08 November 2017AY 2013-145 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 upheld the CIT(A)'s decision to delete the disallowance made under Section 14A r.w.r. 8D. The Tribunal found no new facts or contrary judgments to interfere with the CIT(A)'s well-reasoned order.

What were the facts?

The assessee, engaged in hospitality and property subletting, filed its return. The Assessing Officer (AO) made a disallowance of Rs. 1,17,92,900 under Section 14A read with Rule 8D. The CIT(A) deleted this disallowance, following previous orders in the assessee's own case.

What were the issues?

Whether the disallowance made under Section 14A read with Rule 8D was justified. Whether the CIT(A) erred in deleting the disallowance based on previous orders.

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, “L”

Before: SHRI SHAMIM YAHYA, AM & SHRI SANDEEP GOSAIN, JM

For Appellant: Shri M. V. Rajguru, Shri Ishwar Rathi

आदेश / O R D E R

Per Sandeep Gosain, Judicial Member:

1.

The present Appeal filed by the revenue is against the order of Commissioner of Income Tax (Appeals)-8, Mumbai dated 29.04.16 for AY 2013-14.

White Pearls Hotsl & Investment Pvt. Ltd.

4.

As per the facts of the present case, the assessee is in the business of hospitality and renting out the properties on sublet basis. The return of income declaring total income of Rs. 2,31,40,440/- was filed on 24.09.13 and book profit u/s 115JB of the Act at Rs. 2,29,40,887/-. The case was selected for scrutiny and assessment u/s 143(3) of the Act was completed on 16.09.15 determining total income of Rs. 3,49,96,600/-. The AO worked out the disallowance as per the formula in rule 8D and made disallowance of Rs. 1,17,92,900/- u/s 14A r.w.r. 8D. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties allowed the appeal of the assessee and deleted the disallowance made u/s 14A r.w.r. 8D. Now before us, the revenue has preferred the appeal by raising the above grounds.

3.

The sole ground raised by the revenue is against challenging the order of Ld. CIT(A) in deleting the disallowance u/s 14A r.w.r. 8D.

White Pearls Hotsl & Investment Pvt. Ltd.

5.

We have heard the counsels for both the parties and we have also perused the material placed on record as well as the orders passed by revenue authorities. Before we decide the merits of the case, it is necessary to evaluate the orders passed by Ld. CIT(A). The Ld. CIT(A) has dealt with the above grounds raised by the revenue in para no. 5 of its order. The operative portion of the order of Ld. CIT(A) is contained in para no. 5.1.1 & 5.1.2 of its order and the same is reproduced below:- 5.1.1 This ground pertains to disallowance of Rs. 1,17,92,900/- made under section 14A r.w.r. 8D . I find the same issue had been decided by Hon'ble ITAT in appellant's favour for assessment years 2009-10 & 2010-11. This issue had also come up before me in the appellant's appeal for A.Y. 2012-13. I have decided this issue in favour of the appellant. 5.1.2 Since the facts and circumstances are same for this assessment year, except for the amount involved, following my decision for AY 2012-13 and also respectfully following the decision of Hon'ble ITAT Mumbai in the appellant's own case, disallowance made under section 14A read with Rule 8D in the White Pearls Hotsl & Investment Pvt. Ltd. instant year is deleted. This ground of appeal is allowed.

5. After having gone through the facts of the present case as well as considering orders passed by revenue authorities and hearing the parties at length, we find that Ld. CIT(A) while deciding this ground has taken into consideration the facts of the present case as well as the orders of Hon’ble ITAT in assessee’s own case wherein the Hon’ble ITAT in earlier years had deleted the disallowance by following the decision of Hon’ble Delhi High Court in the case of Cheminvest Ltd. (2015) 378 ITR 33 Delhi. The Ld. CIT(A) has not found any change in the facts and circumstances for the year under consideration except for the amount involved. Therefore, Ld. CIT(A) rightly deleted the disallowance made by AO. Moreover, no new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld CIT (A). Therefore, there are no reasons for us to interfere into or deviate from the findings recorded by the Ld. CIT (A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are White Pearls Hotsl & Investment Pvt. Ltd. judicious and are well reasoned. Resultantly, this ground raised

by the revenue stands dismissed.

7. In the net result, the appeal filed by the revenue stands dismissed. Order pronounced in the open court on 8th Nov., 2017 Sd/- Sd/- (Shamim Yahya) (Sandeep Gosain) लेखासदस्य / Accountant Member न्याययकसदस्य / Judicial Member मुंबई Mumbai;यदनांकDated : 08.11.2017 Sr.PS. Dhananjay आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : अपीलाथी/ The Appellant 1. 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned यवभागीयप्रयतयनयध, आयकरअपीलीयअयधकरण, मुंबई/ DR, ITAT,

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