MUMBAI INTERNATIONAL AIRPORT P.LTD,MUMBAI vs. ADDL CIT RG 8(2), MUMBAI

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ITA 4911/MUM/2013Status: DisposedITAT Mumbai13 November 2017AY 2010-1172 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that Development Fees collected by the assessee are in the nature of capital receipts, akin to cess or tax, and not taxable revenue. It also held that disallowance under Section 14A is not sustainable if no exempt income is earned.

What were the facts?

The assessee, Mumbai International Airport P Ltd., filed appeals against disallowances made by the Assessing Officer, including those related to Section 14A, provision for leave encashment, and depreciation. The Revenue also filed appeals challenging the deletion of disallowances on refurbishment expenses, upfront fees, and other expenditures.

What were the issues?

Whether Development Fees collected by the airport operator are capital or revenue receipts, and whether disallowances under Section 14A are valid when no exempt income is earned.

Which sections of the Income-tax Act were involved?

Section 14A,Section 40(a)(ia),Section 37(1),Section 35DDA

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Income Tax Appellate Tribunal, MUMBAI BENCHES “B”, MUMBAI

Before: Shri P K Bansal & Shri Pawan Singh

Hearing: 13.09.2017Pronounced: 13.11.2017

Heard together (6 matters)

ITA No.1081/Mum/2013
ITA No.4911/Mum/2013
ITA No.4784/Mum/2014
ITA No.4675/Mum/2013
ITA No.5592/Mum/2013
ITA No.5655/Mum/2014

Read from the judgment's own cause title. This page is filed under one of them.

view of this fact, we do not find any illegality or infirmity in the order of the CIT(A), which warrant our interference, while holding that the development fees so received by the assessee is a capital receipt. We accordingly, confirm the order of the CIT(A) and dismiss ground nos.10 & 11 in A.Y. 2010-11 and ground no.5 in A.Y. 2011-12. This disposes of all the grounds in the revenue’s appeal for A.Y. 2010-11.

39.

So far as ground no.6 in A.Y. 2011-12 is concerned, it is similar to ground no.1 in the assessee’s appeal for A.Y. 2009-10 and 2010-11, which relates to disallowance made u/s. 14A. After hearing the rival submissions we noted that the assessee has not earned any exempt income during the impugned assessment year and therefore, the CIT(A) has rightly deleted the disallowance made by the Assessing Officer u/s.14A. Our view is duly supported by the decision of the Hon’ble Delhi High Court in the case of Cheminvest Ltd. 378 ITR 33 (Del) and that of Hon’ble Bombay High Court (Nagpur Bench) in the case of Principal CIT vs. Ballarpur Industries Limited in dated 13.10.2016. Respectfully following these decisions, we dismiss ground no.6 taken by the revenue for A.Y. 2011-12.

40.

Ground no.7 relates to the rate of depreciation allowance allowed by the CIT(A) @15% instead of 10% on taxiways, aprons, parking bays and bridges. We have already dismissed this ground while dealing with ground no.3 in assessee’s appeal for A.Y. 2009-10-& 2010-11.

72 Mumbai International Airport P Ltd.

41.

In the result, assessee’s appeals are statistically allowed and revenue’s appeals are partly allowed.

Order pronounced in the open court on 13th day of November, 2017.

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